Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

COUNTY OF SOUTH GLAMORGAN BILL [LORDS]

Read a Second time and committed.

Oral Answers to Questions — HOME DEPARTMENT

Illegal Immigration

Mr. Biggs-Davison: asked the Secretary of State for the Home Department whether he will make a further statement about illegal immigration.

The Secretary of State for the Home Department (Mr. Roy Jenkins): Yes, Sir. Firm action is fully justified to prevent illegal immigration and to remove those who attempt to enter illegally. Such action has my full support. It is particularly important to ensure that those who seek to organise illegal entry are firmly dealt with. Heavy penalties are available to the courts. Equally, the powers and the machinery exist, and are used fairly but firmly, to deal with people who do not enter unlawfully but misrepresented their intentions in gaining entry and fail to leave by the end of their permitted stay.
I believe that the great majority of people in the country, including the immigrant communities themselves, support this: it is clearly in the best interests of good relations within the community that this should be, and be seen to be, our approach.

Mr. Biggs-Davison: Is the Home Secretary aware that we welcome his words about firm action being used against an

evil which causes dangerous disquiet, added to by the seemingly endless influx of dependants and passport holders? Is the Home Secretary satisfied that the police and others concerned have sufficient resources to deal with this? While welcoming what he said about the special interest of the immigrant community, may I ask whether he is satisfied that he is receiving full co-operation in dealing with something which can poison relations between different ethnic groups?

Mr. Jenkins: The immigration service has established special units which work in close collaboration together with the police. There is close co-operation between the police and other services, and there is also international co-operation. The police have the resources they require, and manpower in the service has increased very substantially in the past year or two. The police have the powers and, broadly speaking, the resources they require.
On the second point that the hon. Member raised, I have mentioned these matters in recent discussions with some of the leaders of the immigrant communities. I believe that while rightly attaching great importance to the protection of their own communities they recognise that they have a responsibility in this field as well and that their co-operation is very important indeed.

Mr. Christopher Price: Is my right hon. Friend aware that, while we all support him fully in his efforts on illegal immigration, there is a tendency in the country and in some parts of this House to lump together all immigration and to give the impression that all immigration is illegal? This tendency has led to a lot of the racialist outbreaks which have taken place recently.

Mr. Jenkins: One must draw a very sharp distinction between those who are entitled to come here—United Kingdom passport holders with no other citizenship, and dependants of those who are already legally settled here—and those who enter illegally. If I had one mild criticism of the question put by the hon. Member for Epping Forest (Mr. Biggs-Davison), it was that he seemed to introduce an element of confusion between legal immigration and illegal immigration. They are in completely different categories and


it is important that we should keep them so.

Mr. Whitelaw: Has the Home Secretary's attention been drawn to an article by Chapman Pincher in the Daily Express on 19th June? Does he appreciate that stories of immigration officers being ordered to ease entry run counter to the remarks he has made in the House today, and which I fully support? Will he make it perfectly clear that the statement, attributed to the Home Office, that these stories are without foundation has his personal support?

Mr. Jenkins: The article by Chapman Pincher in the Daily Express on 19th June contained an allegation of a circular instruction issued to immigration officers that immigrants were not to be rejected even if they had bogus papers. There is no truth whatever in this allegation. There is no such circular and no such instruction.

Mr. Bidwell: Does my right hon. Friend agree that the editors of mass circulation newspapers seem to show an abysmal ignorance of the immigration rules as drawn up by the Opposition when they were in Government? Is it not a fact that the basic rules are determined by the 1971 Immigration Act, which still leaves a lot to be desired in terms of equality between blacks and whites? Does he agree that in the way they sensationalise these stories the newspaper editors show an abysmal ignorance and that it is about time they woke up?

Mr. Jenkins: The editorials vary between the mass circulation and the minority circulation newspapers. Certainly a great deal of comment does not seem to be based upon an understanding of the immigration rules, which are basically those set up by the 1971 Act. The only substantial change I have made, under pressure from both sides, related to the spouses of British women or women with a right to reside in this country.

Mr. Budgen: Will the Home Secretary tell the House whether he accepts that part of Mr. Hawley's report which says that there has been, and is, widespread illegal immigration from the Indian sub-continent?

Mr. Jenkins: There is another Question on the Order Paper which relates

specifically to Mr. Hawley's report. I would prefer to deal with the matter there. I do not think that Mr. Hawley was specifically relating his comment to this issue. I do not mind reports being published. I believe in open government, but there are factors in having to comment on a particular piece of advice as opposed to other advice which would put civil servants and Ministers in considerable difficulty. I think that Mr. Hawley's remarks were mainly directed to the possible size of the pool in the Indian subcontinent and not to the current flow to this country.

General Election, October 1974 (Manchester)

Mr. Andrew F. Bennett: asked the Secretary of State for the Home Department if he will call for a report from the Chief Constable of Greater Manchester on the violence in connection with the October 1974 General Election in Manchester, Blackley, the distribution of leaflets without an imprint, contrary to the provisions of the Representation of the People Act 1949, and with regard to the disruption by the National Front of the meeting at UMIST held by the National Council for Civil Liberties.

Mr. Roy Jenkins: I have received reports from the chief constable on these incidents, on which it appears to me that the police took appropriate action.

Mr. Bennett: Is my right hon. Friend aware that in the Greater Manchester area there are very strong feelings that the forces of intolerance have been treated very favourably by the law enforcement bodies? What steps does my right hon. Friend propose to take to allay those feelings?

Mr. Jenkins: If my hon. Friend and others say that there is a feeling, I must recognise that it exists. But I cannot find, and the Director of Public Prosecutions, who was called in at all relevant stages, did not find, any slackness on the part of the police. Clearly it must be for the Director to decide whether action is taken in particular instances. After the 1974 General Election campaigns, prosecutions were undertaken. One offender was found guilty and fined, and two persons were brought before the courts but were found not guilty. I could not, and


would not, seek to control what the courts say when they are asked to give a verdict.

Mrs. Renée Short: There is widespread concern all over the country at the activities of the National Front. Is my right hon. Friend aware that many people now feel that whenever the National Front appears in public, however much it claims to be law-abiding and non-violent, laws are broken and violence occurs, and that, therefore, the National Front's campaigns and demonstrations should be banned? Will he seriously consider that? It has been suggested to me by certain organisations, and I therefore hope he will tell us that he will seriously consider such action in the interests of racial harmony and peace.

Mr. Jenkins: I wish very much to promote the interests of racial harmony and peace and to preserve those of free speech and civil liberties. I detest and deplore the doctrines of the National Front. If it or any other organisation operates outside the law, it should be subject to the full rigour of the law. However, it is for those who have to operate the law—I am not a prosecuting authority, still less a judicial authority—to decide how the law should be applied in certain circumstances.
In my experience, the technique of the National Front is to operate close to the borders of the law in a provocative way and to hope that those it has provoked will themselves indulge in violence and break the law. I believe that the National Front would be a much less effective organisation if those who are against it would proclaim peacefully, by speech, their detestations of its views and not fall into the trap of behaving on the ground just as the National Front would like.

Mrs. Renée Short: "One down, one million to go."

Mr. Stokes: Is the Home Secretary aware that there is widespread concern and anxiety about the so-called National Council for Civil Liberties, which does not appear to have much concern for the liberty of English people but is rather a semi-revolutionary organisation?

Mr. Jenkins: The National Council for Civil Liberties often sends me its views. I consider them carefully and

treat them with the respect I think they deserve. Everyone is entitled to express his view, even the hon. Member for Halesowen and Stourbridge (Mr. Stokes), who does so quite frequently.

Comprehensive Community Programmes

Mr. Steen: asked the Secretary of State for the Home Department what progress the Government have made in establishing comprehensive community projects.

The Minister of State, Home Office (Mr. Brynmor John): As was indicated in a reply given to a Question by my hon. Friend the Member for Oxford (Mr. Luard) on 7th April, the development of comprehensive community programmes as a means of tackling the problems of urban deprivation more effectively is a long-term process. Our Department is now working with Birmingham District Council and the Institute of Local Government Studies, Birmingham University, to establish a framework for the development of comprehensive community programmes.

Mr. Steen: Does the Minister agree that if the comprehensive community programmes are to be a success the people in the areas in which the programmes are based must have power over the decision-making process and control over their own environment? Will he therefore see that each of the programmes has a neighbourhood council based in the locality and that it is monitored properly so that the people can be given real power over their own destiny?

Mr. John: I think that the purpose of working out these studies is to decide in what way the comprehensive community programmes can best be fulfilled. For us to say from the centre that such and such a pattern should be adopted by particular localities is exactly contrary to what the hon. Gentleman said about each locality having power over its own destiny.

Mr. Lane: In the present situation, does not the Minister of State agree that it is not enough for us merely to condemn racialism and racial discrimination—which I hope we all do—but that there is also a need for a stronger attack than hitherto on urban deprivation, from


which whites and blacks alike are suffering.

Mr. John: I join the hon. Gentleman in hoping that, in spite of indications to the contrary, all of us in this House condemn racial discrimination. One of the problems about urban deprivation, however, is not merely the amount of money which must be devoted to it in total but how the money can be most effectively used. Many of the problems have been intractable, and that is why a study is being made of how best we can devote our resources as well as of the resources we devote.

Mr. Dennis Warren

Mr. Litterick: asked the Secretary of State for the Home Department how much of the remission of sentence lost by Mr. Dennis Warren in the course of his dispute with the prison authorities over the wearing of prison regulation footwear has since been restored to him.

Mrs. Wise: asked the Secretary of State for the Home Department when he expects Dennis Warren to be released from prison.

Mr. Atkinson: asked the Secretary of State for the Home Department if he has yet received the latest special review of the Parole Board in regard to Mr. Des Warren; and if he will make a statement.

Mr. Roy Jenkins: Mr. Warren, who has had one special parole review and is not eligible for a further routine review, is due for release on 3rd September this year. This prospective release date takes into account the restoration of 21 days' remission lost in July 1975. Mr. Warren was originally punished for refusing to wear prison shoes, but in the light of later medical advice this award was withdrawn.

Mr. Litterick: I am grateful for that reply. Will my right hon. Friend confirm that Mr. Warren asked for a medical examination when his dispute with the prison authorities about the wearing of prison shoes first developed? Why was there such a lengthy delay in finally granting this man a medical examination for which he asked? Will my right hon. Friend tell the House what progress the Department has made in investigating a complaint by the prisoner against Prison

Officer Pendal, who has made certain mendacious and damaging allegations against him and which this prison officer has since repeated on being transferred to Leicester Prison, to which Mr. Warren was also transferred?

Mr. Jenkins: There was some delay in the medical investigation. I shall look into the matter and write to my hon. Friend. The matter was fully investigated by the Prison Department, and Mr. Warren had 28 days' remission restored. Unfortunately, this did not make as big a difference as it might have done because he had been charged with 33 offences against discipline, 31 of which were found proved, with a resulting 17 awards of forfeiture of remission. That is why the one case was only a relatively small part of the matter. However, it shows that the Prison Department handled the matter with detachment. It restored the remission in that case. As far as the allegation against a particular prison officer is concerned, I have investigated it thoroughly and have written to my hon. Friend and several other hon. Members.

Mrs. Wise: Will my right hon. Friend accept that it is now crystal clear that he has successfully ignored the wishes of the trade union and labour movements in this matter and that we are, therefore, asking not for anything he might regard as a concession but only that Des Warren should not be treated worse than the average prisoner? Is my right hon. Friend aware that by the time he is released Des Warren will have served a considerably longer than average proportion of his sentence? Can he explain why, if Mr. Warren's accusations against members of the prison staff have been proved untrue, they did not result in the normal consequences for him?

Mr. Jenkins: It appeared that my hon. Friend was anxious to bring further charges against Mr. Warren in the latter part of her question. I am anxious, and I should have thought that people who have followed this rather long saga would be anxious, to see a continuation of Mr. Warren's recent good behaviour, which, if there is no further trouble, will lead to his release on 3rd September. It will be possible for him to apply to the governor and/or the board of visitors for restoration of more remission in early August.


I have not endeavoured to ignore anybody's views. They have been sufficiently strongly expressed that the option to ignore them has not been open to me. I have been consistently concerned to uphold the rule of law and to ensure that Mr. Warren should be treated no less, but no more, favourably than a normal prisoner. If my hon. Friend asks why he has lost more remission than the normal prisoner, the answer lies in the 31 charges which have been proved against him.

Mr. Atkinson: None of us wishes to prolong this saga, but is not some further explanation necessary? Has not Mr. Warren now served 780 days in prison, which represents 71 per cent. of his original sentence, and on the basis of past averages is not this an unprecedented situation? Is it not the case that Mr. Warren was given a deterrent sentence of three years' imprisonment on a charge which would not now exist if the Law Commission's views were accepted? Is it not the case that a charge of conspiracy to intimidate would no longer be applicable, and should not my right hon. Friend now make a statement on the situation?

Mr. Jenkins: The Law Commission's report, upon which the Government propose to ask Parliament to legislate, makes clear that even if its recommendations had been implemented Mr. Warren would still have been liable to the same sentence because of the additional charges brought against him. It is not relevant to compare the total sentence served by Mr. Warren with the average served by other prisoners unless one takes into account the number of offences with which Mr. Warren has been charged. That number is far above average and has as much chance of being unprecedented as does the proportion of his sentence served by Mr. Warren. Mr. Warren's pattern of behaviour has changed substantially. I hope that this will continue, and I believe that it would be in the best interests of those who are very concerned about this case if they did not continue to believe that they could get Mr. Warren out of prison by political pressure.

Service Tenancies

Sir J. Langford-Holt: asked the Secretary of State for the Home Department

how many service tenancies are in the gift of his Department; what are the rules govErning security of tenure for such tenancies; and what modifications have been or are proposed to be made to these rules to bring them into conformity with the views of Her Majesty's Government as expressed in relation to agricultural service tenancies.

Mr. John: The great majority of the 11,500 dwellings owned by the Home Office are not rented but are occupied by members of the prison service without charge under their conditions of service, which also include an obligation to vacate the quarters when required to do so. There is no intention to change these conditions.

Sir J. Langford-Holt: Is the Minister aware that there is strong resentment in the agriculture industry, which produces the food of the nation, that it should be treated under different standards from those applied by the Government to themselves? Is he aware that it is considered that this action is being taken in agriculture because the Government, who do not allow the same standards to apply to themselves, are not affected?

Mr. John: Contrary to what the hon. Gentleman has said, the Bill is warmly welcomed by that section of the agriculture industry represented by tenants of farmers. Opposition Members may not agree, but they can express their own views—preferably from a standing position if they catch your eye, Mr. Speaker. Where the Government are affected in agriculture tenancies, my right hon. Friend has already said that we shall act within the spirit of the Bill.

Mr. Gow: Since so many of these houses are occupied by officers in the prison service, can the Miniser give an assurance that they will not be caught by the notorious provisions of the Finance Bill which seek to impose taxation on those who occupy such houses?

Mr. John: The hon. Gentleman must put down a separate Question on that matter at the correct time.

British Broadcasting Corporation

Mr. Frank Allaun: asked the Secretary of State for the Home Department when he next proposes to meet the Chairman of the BBC.

Mr. Ovenden: asked the Secretary of State for the Home Department when he next proposes to meet the Director-General of the BBC.

Mr. Thompson: asked the Secretary of State for the Home Department when he next intends to meet the Chairman of the British Broadcasting Corporation.

Mr. Roy Jenkins: While I am always happy to meet the Chairman or the Director-General of the BBC, I have no immediate plans to do so.

Mr. Allaun: At their next meeting, will my right hon. Friend suggest to the Chairman of the BBC that he should reject the advice of Mrs. Mary Whitehouse, who is now swinging from porn to patriotism and has recently said that television coverage of the horrors of modern war, particularly in Vietnam, weakened the will for national freedom? Does not my right hon. Friend agree that this kind of censorship would suppress the truth, whereas honest reporting on television and in the Press will help the will for peace and disarmament?

Mr. Jenkins: I do not believe in censorship, and I certainly believe in honest reporting, but I shall not suggest to the Chairman of the BBC that he should reject Mrs. Whitehouse's advice, because I might be put under pressure on a future occasion to suggest that he accepts her advice. It is much better, in accordance with our normal practice, that the chairman should make up his own mind about advice he receives.

Mr. Gwynfor Evans: When the Home Secretary meets the Chairman of the BBC, will he discuss the early implementation of the decision made by the Government in November 1974 to establish the fourth television channel in Wales as a national Welsh channel on which Welsh language programmes will be given time at peak viewing hours? Is he aware of the incalculable damage being done to the Welsh language and culture among children and young people by the present situation? Is he aware that an ancient culture is in danger of mortal injury?

Mr. Jenkins: I am aware of the nature of the reports we have had which command broad support from the Government, subject to the overwhelming pressure

on resources at present. I am prepared to discuss this matter with the chairman, subject to the resources which the Government are able to make available. It is an appropriate subject of discussion with the chairman because it is a matter of resources and not of programme content.

Mr. Ovenden: When my right hon. Friend has the opportunity of meeting the Chairman or Director-General of the BBC, will he make it abundantly plain to either of those gentlemen that the Government have no intention of approving any increase in licence fees this or next year, and that when the British people are being asked to accept wage restraint they feel affronted by the rumours and stories being put about concerning the BBC's claims for increased licence fees?

Mr. Jenkins: The BBC has not put in any application. I am not sure that I can go quite as far as my hon. Friend, but when I announced the increases on 29th January 1975 I made it clear that the level of licence fees was intended to last for at least two years. That remains the position. The BBC has not yet made any application for an increase.

Mr. Wiggin: Will the right hon. Gentleman ask the Chairman of the BBC if he will direct his attention to the problem of my constituents, who do not like receiving their television programmes in Welsh, which they find totally unintelligible, the Welsh programmes frequently interrupting national English programmes? This is a scandal and should be put right.

Mr. Jenkins: Yes, I am aware that there is a certain cross-Bristol Channel problem that operates both ways as regards Welsh and English television.

Electoral Law

Mr. Rathbone: asked the Secretary of State for the Home Department whether he intends to refer the additional member system as recommended by the Hansard Society to any Speaker's Conference on Electoral Reform.

Mr. Roy Jenkins: The Hansard Society has made an interesting proposal, but I cannot yet say whether it will be within the terms of reference of the Speaker's Conference on Electoral Law.

Mr. Rathbone: Is the right hon. Gentleman aware that, apart from whether it is within the terms of reference, there are many people in the Houses of Parliament and outside who are concerned at the way the Government appear to be dragging their feet in not setting up this Speaker's Conference? Will he expedite the matter?

Mr. Jenkins: Yes, we should like to get on and get the Speaker's Conference set up. I am not sure that the hon. Gentleman is correct about the Government dragging their feet. My right hon. Friend the Prime Minister has made suggestions to other party leaders on the terms of reference. The replies have been received, but only fairly recently. It is a matter for the Prime Minister, in consultation with the leaders of the other parties, to determine the terms of reference. I agree that there are a number of matters of ongoing business, apart from wider and more controversial issues, on which it is important to have the Speaker's Conference reconvened. I hope, Mr. Speaker, that it will be convenient to you that that should be done at a fairly early stage.

Mr. Michael Stewart: Is my right hon. Friend aware that this system of voting is not recommended by the Hansard Society or by the commission appointed by it, and that the Hansard Society takes no responsibility for the commission's report?

Mr. Jenkins: Quite so. I am grateful to my right hon. Friend for that correction. As an ex-Chairman of the Fabian Society—I believe that my right hon. Friend may be as well—I should be aware that bodies can sponsor inquiries without taking any responsibility for the nature of their results.

Sir D. Walker-Smith: Apart from the rather more esoteric remedies that are proposed by one source or another, does the right hon. Gentleman accept that action is urgently necessary by reason of the gross disparities of electorates thrown up by the present system, as evidenced by his Department's answer to my Question a fortnight ago?

Mr. Jenkins: With respect—this is most exceptional for the right hon. and learned Gentleman—I do not think that his supplementary question bears directly

upon the Question or upon a Speaker's Conference. The right hon. and learned Gentleman has referred to the disparities which arise within the time scale which the House has laid down in which the Boundary Commission should do its work. In fact, the commission is doing its work within that time scale. It is moving towards the earliest possible date within the span allowed to it. One of its objectives will be precisely to correct such disparities.

Model Aircraft Flying (Bromley)

Mr. John Hunt: asked the Secretary of State for the Home Department whether, in the light of the recent representations he has received from residents living in the vicinity of Norman Park, Bromley, he will now rescind his provisional approval of the London borough of Bromley's proposed byelaws in respect of the flying of model aircraft in the parks and commons and reconsider the imposition of a total ban on flying of such machines, as orginally requested by Bromley Council.

The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): Consultations between the Home Office and the council about alternatives to a total ban on the flying of power-driven model aircraft have recently ended without agreement. If the council will now make a byelaw in such terms as it thinks right, we shall consider it afresh in accordance with the statutory procedure.

Mr. Hunt: I thank the hon. Lady for that answer. When she considers the byelaw, will she bear in mind that this matter has been drifting on for a long time—almost two years—and that local residents are at the end of their tether, especially during weekends, when they are subjected to almost incessant and intolerable noise, as well as the risk of physical danger, from these machines, which often fly at between 60 and 100 m.p.h.? In these circumstances, does the hon. Lady agree that the request from Bromley Council for a total ban is perfectly reasonable? Should she not bow to local opinion on this matter?

Dr. Summerskill: I can assure the hon. Gentleman that I am aware of the strong feelings that are held by some of his constituents about the dangers of the


unrestricted flying which now goes on. Those feelings will be taken into consideration if the council formally submits a byelaw for consideration.

Demonstrations (Police Photographers)

Mr. Skinner: asked the Secretary of State for the Home Department what representations he has received about police photographers being present at working-class demonstrations; and whether all films have been destroyed when protests have been made by members of the public involved.

Mr. Roy Jenkins: Since March 1974 I have received representations about the presence of police photographers at five demonstrations. No photographs were taken at two of these demonstrations; a further film was taken solely for police training purposes; the photographs taken at the other two demonstrations were destroyed.

Mr. Skinner: Does my right hon. Friend agree that we have reached a sorry state—[HON. MEMBERS: "Hear, hear."]—when police photographers are sent to a little place called Bletchley, where about 50 women were marching on May Day about cuts in public expenditure? Is he entirely happy about the retention of film used outside Downing Street when decent Brazilian citizens, along with British people, were demonstrating against President Geisel? Does he not realise that the retention of that film might mean that those protesting against that oppressive regime could be marked for life if they dared to return to Brazil?
Why continue this silly practice? Why does my right hon. Friend prevent the police from using much-needed money for other purposes by sending them all round the country to photograph Left-wing people who are demonstrating but never bother to take films of demonstrations such as the one mounted by the National Front at Rotherham on Saturday?

Mr. Jenkins: If my hon. Friend will consider the matter calmly, as I know he mostly does—[Interruption.] The increase in the number of complaints received has been very small over the past two years. I agree that the police should exercise restraint in these matters, and that it can be foolish to take such photographs in certain circumstances, but I have no

indication of any abuse. Let me assure my hon. Friend that as regards the Brazilian demonstration there was no question of the film passing outside the control of the Metropolitan Police. [Interruption.] The Metropolitan Police have the right to take a film and to use it for training purposes. I have no statutory power, even if I thought it wise, which I do not, to say that the police—[Interruption.] I have no statutory power, even if I thought it wise, which I do not, to say that the police alone among people in this country should never be allowed to take photographs.

Mr. Hordern: As these working-class demonstrations are entirely peaceable, as the hon. Member for Bolsover (Mr. Skinner) has frequently said, what possible objection can there be to the police taking such photographs for training purposes?

Mr. Jenkins: I have indicated my attitude fairly clearly. I do not necessarily think it would be a good thing if every time a little demonstration were held a great battery of police cameramen attended it, or even one police cameraman. There is a question of balance and sense. I hope that broadly speaking the police will observe that balance. I am not going to put on a special ban—indeed, I have no power to do so—but I think that the police should exercise restraint in this as in other matters.

Mr. Clemitson: For what purpose other than training are photographs taken?

Mr. Jenkins: In certain circumstances photographs could well be important to ascertain what had happened in a situation in which public order was threatened or damaged. I do not think one could possibly object to photographs being available of the Red Lion Square demonstration, for instance. They might be of value in court proceedings. I cannot take the view that such photographs should automatically not exist or should be destroyed.

Wymott Prison

Mr. George Rodgers: asked the Secretary of State for the Home Department when he now expects the new prison project at Ulnes Walton, Chorley, to be completed.

Mr. John: We expect building work to be completed in August 1977 and occupation to begin about three months later.


The establishment will be known as Her Majesty's Prison, Wymott.

Mr. Rodgers: I thank my hon. Friend for that information. Will he advise me whether the second stage of the prison development on this site is to go ahead and whether he is satisfied that the proposed restrictions on public spending will not prevent amenities, such as housing, schools and so on, being provided to serve the population who will work at the establishment?

Mr. John: Certainly the houses, schools and amenities under the first stage are provided for. Obviously, in the present financial climate, some delay is to be expected on the second phase, but the facilities for that will not be needed until it is completed.

Firearms Control

Mr. Hicks: asked the Secretary of State for the Home Department what representations he has received to date in support of increasing the control of firearms.

Dr. Summerskill: The principal local authority associations, the Magistrates' Association, the National Farmers' Union and various bodies representing the police are among those who support the introduction of more stringent controls over certain firearms.

Mr. Hicks: Before any final decision is made by the Minister as to whether further legislation is required, will she bear in mind rural areas, in which shooting is a long-accepted interest? Shooting involves a wide cross-section of society and has been long established. I hope that this will be borne in mind.

Dr. Summerskill: I have announced at a previous Question Time that the Government intend to introduce legislation to improve the existing controls over shotguns—in the next Session, we hope. However, I shall certainly bear in mind what the hon. Member has said. I am not sure that the legislation would interfere with the practice he has described.

Mr. Fernyhough: When considering this legislation, will my hon. Friend bear in mind that there is growing apprehension about the irresponsible use of high-powered airguns? In my constituency vandalism affecting both private and

public property has been occasioned by the firing of such guns, and animals and people have been injured. When preparing this legislation, will my hon. Friend seriously consider whether these guns might be made unavailable except under licence?

Dr. Summerskill: The existing controls over such weapons as rifles and pistols are adequate at present. There are no proposals to make them more stringent. The legislation will concern shotguns. Figures show that since 1970 shotguns have been used in crime more frequently than any other weapons subject to certificate control.

Dog Breeding Establishments

Mr. Burden: asked the Secretary of State for the Home Department if he will take steps to amend the Breeding of Dogs Act 1973, in order to ensure that breeding establishments for dogs provide bedding materials and adequate exercise.

Dr. Summerskill: No, Sir. The Act already requires the licensing authority to have regard to such matters before granting a licence and to attach appropriate conditions to the licence. The authority has power under the Act to inspect licensed premises to ensure that these conditions are complied with.

Mr. Burden: Is the hon. Lady aware that under the Breeding of Dogs Act 1973 it is mandatory for people breeding dogs to supply bedding and to give them exercise? Is she aware that at the Oxford Laboratory Animals Centre at Capel Isaac, where beagles are bred for vivisection in this country and abroad, after they are six weeks old and until they are sold for vivisection at between 16 and 20 weeks they are given neither bedding nor exercise? Will she see that this matter is put right.

Dr. Summerskill: I understand that the firm that the hon. Gentleman has mentioned holds a licence under the Act. The licensing authority will doubtless take the conditions which exist there into account when determining whether there has been a contravention of any condition of the licence. Also, there is the Protection of Animals Act, 1911, which makes it an offence to cause an animal unnecessary suffering.

Mr. Mellish: Will my hon. Friend be good enough to get our priorities right and have a chat with the Secretary of State for the Environment to make sure that equipment and bedding are provided for homeless families before we start messing about with dogs?

Oral Answers to Questions — LORD PRESIDENT OF THE COUNCIL (SPEECH)

Mr. Lawson: asked the Prime Minister if the public speech at Eastbourne on 8th June by the Lord President of the Council on public expenditure represents Government policy.

Mr. Norman Lamont: asked the Prime Minister whether the public speech on economic policy by the Lord President of the Council to NALGO at Eastbourne on 8th June represents Government policy.

Mr. Michael Latham: asked the Prime Minister whether the public speech on public expenditure and economic policy made by the Lord President of the Council to NALGO in Eastbourne on 8th June represents Government policy.

The Prime Minister (Mr. James Callaghan): Yes.

Mr. Lawson: In that speech, the Lord President boasted that the present Government had increased public expenditure proportionately more than any previous Government in our history. Is not that precisely why the country is in such a mess today? As the Prime Minister has rightly made a point of being markedly less devious than his predecessor, why does he not come clean and brave the wrath of the wild men and still wilder women of the National Executive Committee and state here and now that substantial further public expenditure cuts in 1977–78 are absolutely essential?

The Prime Minister: I read my right hon. Friend's speech. I thought it was an extremely good one. It is true that public expenditure has increased faster. I think that the difficulty that now exists arises because there has not been a similar growth in gross national product. [Interruption.] Hon. Members are quick

on the uptake today. A growth in gross national product has not taken place because of the gross expansion of monetary supply under the policies of the previous Conservative Government, so there is a chain effect here that we have to correct.
There were many other things in my right hon. Friend's speech which I thought were extremely good, too. For example—[Interruption.] The Question is related to whether I agree with the speech made by my right hon. Friend, and I am sure that the hon. Member for Blaby (Mr. Lawson) would like to hear some of these things. I hope he would agree that detailed consultation with the unions was the secret of successful government. I hope he would agree that the number of days lost through strikes has been the lowest since 1968. I hope he would agree that the services of the independent Advisory, Conciliation and Arbitration Service have helped to produce this state of affairs. I hope he would agree that the Government's approach to industrial democracy—

Mr. Lawson: On a point of order, Mr. Speaker. I have just put a supplementary question to the Prime Minister, and his answer bears no relation to that whatsoever.

Mr. Skinner: On a point of order, Mr. Speaker. Before you answer that point of order, perhaps it would help you if you understood that one of the reasons why the supplementary question put by the hon. Member for Blaby (Mr. Lawson) had to be explained at great length by my right hon. Friend was that it did not really come from the hon. Member at all but came from Conservative Central Office. [Interruption.]

Mr. Speaker: All this is only denying time for Prime Minister's Questions.

The Prime Minister: Further to the point of order raised by the hon. Member for Blaby, if I may say so, Mr. Speaker, I was answering that part of the question that the hon. Member had from the Conservative Central Office but which he did not read out.

Mr. Wrigglesworth: Unfortunately, Mr. Speaker, I have not had the benefit of any briefing from any office. Does not my right hon. Friend think that it might


be better if people spent less time considering the quantity of public expenditure and more time considering its quality? In looking at their programmes for the forthcoming year, will the Government look at ways in which public expenditure can be used more efficiently? Will they also consider how much is really being used to achieve objectives which would please hon. Members on the Government side of the House?

The Prime Minister: Yes, Sir. I think that the question of priorities in public expenditure is extremely important. One of the things that the Government constantly have to do is to review the nature of their priorities. As I have pointed out to the House on innumerable occasions—Prime Minister's Question Time has a certain repetitious air—there is a dilemma regarding next year, the year in which I hope and expect that private investment will take more of our resources than it has done this year. That is the problem to which the Government are addressing themselves.

Mr. Lamont: May I ask the Prime Minister about the reply he has just given to my hon. Friend the Member for Blaby (Mr. Lawson)? If the Prime Minister is looking for my question, let me assure him that it comes from The Times and Peter Jay and not from Conservative Central Office. Can the right hon. Gentleman tell the House how he expects the economy to achieve the growth rate necessary to sustain the planned level of public expenditure at the rate specified in the Government White Paper on Public Expenditure when that has been achieved in no recent period of economic history? Is the Government's policy based on a belief in levitation?

The Prime Minister: No, Sir. The Government's policy is based on a reasonable assessment of the growth rate that can be sustained if we can successfully deal with other matters. The OECD agrees with us and is hoping for the same growth that we hope for. In the first quarter of this year our growth rate was 1 per cent. higher, and that in turn will, I trust, if we can maintain control of other factors, lead to a reasonable growth rate.

Mr. Thorpe: Are we to gather from the exchanges that there has been a

serious leak? In view of the gravity of the matter, will the Prime Minister consider assigning the services of Sir Douglas Allen?

The Prime Minister: If I may quote something which I read on the tape earlier today, these documents have been deposited outside my door in basketfuls.

Mr. Heffer: Is my right hon. Friend aware that all hon. Members on this side of the House are keen to see one cut in expenditure? We would like a cut in expenditure on the unemployed by getting them back to work. What steps are being taken in a positive direction to ensure that more workers get back to work? That would cut public expenditure.

The Prime Minister: I am obliged to my hon. Friend for putting that serious point. The unemployment situation is bad and it should cause concern to hon. Members on both sides of the House. The Secretary of State for Employment has introduced a number of measures, with financial backing from the Chancellor, to help school leavers. We need to do more, but if we are to do more that will necessitate rearranging our existing priorities.

Mrs. Thatcher: Instead of constantly extolling the benefits of public expenditure, which is now at a level of 60 per cent. of the national income, will the Prime Minister agree that that has led to the highest rate of income tax on the lowest level of earnings in countries anywhere in Europe? Does he not agree that we would have their level of prosperity if the Government had a policy which gave more incentive to the people to work harder and to invest?

The Prime Minister: The figures that the right hon. Lady has quoted from columns 90 and 91 of the Official Report of 24th May are undoubtedly correct. [Interruption.] I can assure the right hon. Member for Penrith and The Border (Mr. Whitelaw) that I do not rely on the brief to which I have referred. I went back to Hansard to check, and the Leader of the Opposition is correct. But she is drawing incorrect deductions. Public expenditure, as I have said on previous occasions, helps to enlarge our freedoms, which is something for which the Labour movement stands.

Mrs. Thatcher: Does that mean that the Prime Minister is prepared to go on increasing public expenditure and saying to working people that he knows better than they how to spend their pay packets?

The Prime Minister: That is all very well for the hustings, but the right hon. Lady knows much better than that. If she ever sits on this side of the House again, she will find that she too has to arrive at a proper balance between public and private spending. That kind of interchange will get her nowhere.

Oral Answers to Questions — TUC

Mr. Ovenden: asked the Prime Minister if he will list the subjects on which he has received representations from the TUC since the beginning of May.

The Prime Minister: I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) on 10th June.

Mr. Ovenden: Will my right hon. Friend confirm that in discussions with the TUC on child benefits it was not the TUC which took the initiative in suggesting the abandonment of the scheme? Will he think again about proceeding with the scheme in view of the opinions of the TUC and Labour Back Benchers? Is he aware that those who are urging him to reconsider are doing so because they believe it is important for tackling family poverty, not because they support the opportunist clamourings of the Conservative Party?

The Prime Minister: I am grateful for the opportunity to explain the position of the General Council of the TUC. It has confirmed its support of the principle embodied in the Child Benefit Act. It is incorrect to say that the scheme has been abandoned. It is on the statute book and will be implemented. The Government have already made a start by ensuring £1 a week for the first child. That is not much but it is a start towards implementing the scheme, and we hope to do more in that direction. There will be a working party to examine the prospects

and to see whether the scheme can be phased in, as distinct from introducing it immediately, which would have cost more money that the Government have available at present.

Mr. Churchill: Is the Prime Minister aware that all that the workers on the shop floor of the shipbuilding and aircraft industries want is orders for ships and aircraft, not nationalisation?

The Prime Minister: I am not aware of that. I had the good fortune recently of addressing the Boilermakers Society, which perhaps knows as much as the hon. Gentleman about what its members really want. I was assured that the worldwide condition of the industry is such that they want to see rationalisation and nationalisation of the industry. That is the policy of the Government.

Mr. Corbett: Does my right hon. Friend agree that in his talks with the TUC it will be no use to ask working people, who are willingly co-operating with the Government to get us through our problems, to accept cuts in living standards in terms of homes, schools and hospitals?

The Prime Minister: Yes, I agree. All hon. Members on this side of the House realise that public expenditure is of particular concern in helping to level the position of ordinary people. I hope that no hon. Members on our side want to see a levelling-down process. If there has been a halt in moving it upwards, I hope that it will be only temporary while manufacturing industry gets going.

Mr. Prior: Will the Prime Minister comment on the attitude of the TUC to the decision yesterday of the National Executive of the Labour Party? Would it not be better for the country if decisions were made in this House and not by the TUC or the National Executive?

The Prime Minister: I would be happy if more decisions were made more quickly in the House instead of time being taken, as it has been recently, on discussions on amendments. I have no ministerial responsibility for the General Council of the TUC or for the National Executive.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. Eldon Griffiths: On a point of order, Mr. Speaker. I am grateful to you for allowing me to raise this point of order, of which I have given you notice, about Question No. 9 to the Home Secretary. It concerns the use of the adjective "working-class" in the second and third lines of the Question, which speaks of
photographers being present at working-class demonstrations".
My experience of the Table Office is that the Clerks quite rightly resist hon. Members putting on the Order Paper editorial points or points of political argument and ask that our Questions should be objective. May I ask you to rule that the nasty language of class warfare has no place on the Order Paper of the House of Commons?

Mr. Speaker: The wording of the Question was obviously approved or it would not have been on the Order Paper.

Mr. Tapsell: Further to that point of order, Mr. Speaker. May I say with the greatest respect that although it is implicit that the wording was approved by the Table, I understood my hon. Friend to be making the very important point that it should not have been approved, and that in future Questions worded in such a way should not be approved.

Mr. Atkinson: Further to that point of order, Mr. Speaker. Do we understand Conservative Members to be advancing the argument that the words "working class" should never appear on the Order Paper?

Mr. Speaker: If there is any doubt about whether the wording of a Question or motion should be approved, it is referred to me.

Mr. Eldon Griffiths: I am referring it to you, Mr. Speaker.

Mr. Speaker: The hon. Gentleman is, but obviously the Question was considered to be quite in order.
I find it difficult to rule that the use of the expression "working-class" is part of the class war. [Interruption.] There is no need for temperatures to rise. There is plenty of time later in the day.

I hope that the hon. Gentleman will let me look at this matter. If I feel that I need to make a statement to the House, I shall do so.

Mr. Fairbairn: rose—[Interruption.]

Mr. Skinner: You will appreciate, Mr. Speaker, that I was responsible for putting down Question No. 9 to my right hon. Friend the Home Secretary, a Question including the expression "working-class". Unfortunately for me, I also tabled on the same day before 4 o'clock a Question to my right hon. Friend the Prime Minister, and somewhat misguidedly framed it as follows: "When he next expects"—

Mr. Speaker: Order. The hon. Gentleman must not pursue another Question on this point of order. I think that I have settled the matter. Does the hon. Gentleman wish to pursue another point?

Mr. Skinner: I was going on to say, Mr Speaker, in relation to your deliberations on Question No. 9 and whether the expression "working-class" should be used in a Question, that I also tabled another Question which might help you in your deliberations. In it I asked my right hon. Friend the Prime Minister whether he expected to meet the CBI. I do not want him to do so. I think that he has met the CBI too often as it is. But it is the same use of class Ianguage.—[Interruption.]

Mr. Speaker: Order. We are getting a little out of control.

Mr. Fairbairn: On a point of order, Mr. Speaker. Labour Members said when I stood up earlier to try to catch your eye, "There's a typical working-class man". Therefore, I should be obliged if after your deliberations you would advise me and other hon. Members whether we are classified as working.

Mr. Speaker: I am prepared to give that ruling only in private.

PRESIDENT OF FRENCH REPUBLIC (VISIT)

The Prime Minister (Mr. James Callaghan): With your permission, Mr. Speaker, I wish to make a statement about my talks with the President of the French Republic, M. Valery Giscard d'Estaing.
President Giscard d'Estaing's State visit to the United Kingdom marks the opening of a new and hopeful chapter in the long history of Anglo-French relations. All of us who had the pleasure of hearing the President's address from the Royal Gallery yesterday welcomed the positive and constructive spirit in which he spoke of the relationship between our two countries. I am happy to say that a similar spirit of friendship, candour and constructiveness has marked our official talks. Both of us welcomed the opportunity to deepen the understanding between our two Governments and countries, and all our discussions were conducted in this spirit.
In the course of both our private talks and the official sessions, we were able to touch on most of the principal subjects of joint interest and concern to our two Governments. In particular, as partners in the European Community, we had a full discussion on Community matters, including the question of direct elections to the European Assembly, on which both sides were able to explain their concerns. We also discussed the common fisheries policy, on which my right hon. Friend the Foreign and Commonwealth Secretary and I explained to the President the critical importance we attach to the forthcoming negotiations.
On the Tindemans Report, and the future of Europe generally, we had a useful exchange of ideas and achieved a much clearer recognition of how much common ground there is between us.
Finally, and perhaps of greatest significance for preventing future misunderstandings, we reached agreement on the need for closer and more systematic contacts between our two Governments. The President and I have decided to meet once a year, accompanied by ministerial colleagues as appropriate, in order to discuss relations between our two countries and, in particular, the problems of common interest deriving from our membership of the European Economic Community. The first meeting will be held in Paris before the end of this year. We have decided that there should be a similar annual meeting between the Ministers responsible for foreign affairs, and that there should be periodic meetings between the other principal Ministers, notably those responsible for home affairs,

the economy and finance, energy, industry, defence and trade. The text of the Joint Declaration embodying this decision will be printed in the Official Report.
France should know that we welcome unreservedly this new arrangement and will play our full part in raising our relationship to a new high level. I hope that other nations of Europe will see it as a contribution to the cohesion of the European Community, and thus as being of benefit to Europe as a whole.

Mrs. Thatcher: May I on behalf of my right hon. and hon. Friends thank the Prime Minister for making that statement and also say that we listened to the President's speech in the Royal Gallery yesterday with admiration and pleasure. It was a very great speech for a great occasion, and we hope that it will signal a new chapter of co-operation in relations between our two countries.
In that speech the President mentioned more co-operation on some technological projects with good commercial prospects. Has the Prime Minister anything further to report on that? It was thought that it might refer to co-operation on the fast breeder reactor, on which France has done a great deal of research.
The Prime Minister referred to direct elections and to the common fisheries policy. Did he get any further on a common approach to those two most important subjects?

The Prime Minister: I am much obliged to the right hon. Lady for what she said. We had a general discussion on the question of technological co-operation. One or two matters have been identified, but it would be premature to indicate them yet. To do so might raise false hopes as to where we could look for future co-operation. It is certainly the kind of thing I should want to follow up before visiting Paris.
On nuclear co-operation, we ourselves have done a great deal of research on the fast breeder reactor, and we have a world-famous team at Culham dealing with the possibilities, although a long way off, of nuclear fusion as opposed to fission. I indicated to the President—and he agreed—that there was room for cooperation between us here. This will be a case where the appropriate Ministers can meet to carry it further.
On the common fisheries policy, I asked the President whether he would agree, having heard the great importance we attached to the matter, that our officials should meet to discuss it, and he so agreed. The French have traditional fishing rights close to our shores which will need to be the subject of discussion even with an extension to the 200-mile limit. We all know how ticklish 200-mile limits and traditional fishing rights can be. It is best that our officials should make a beginning on this, and then see whether we can get a common approach to the common fisheries policy.
With regard to direct elections, the President explained in great detail his stand on this matter and what France regards as the necessity of relating whatever is done to the terms of the treaty. But he does not, I think, exclude practical adjustments to make the treaty more workable, and it is on that basis that we held our discussion. But it would have been wrong for France and Britain to come to conclusions on this matter either in advance of a discussion in this House, which we have undertaken to hold, or in advance of the European Summit, which will be held in the middle of July.

Mr. Grimond: We are very glad that the President's visit is such a success, and also that there will be meetings of officials on the common fisheries policy. I hope that there will be a meeting very soon.
Will the Prime Minister say whether NATO was discussed, and whether he is able to say anything about the defence of Europe?

The Prime Minister: There was no mention of NATO in our official discussions, and therefore I have nothing to report to the House on that matter.

Mr. Kinnock: Does my right hon. Friend recall that in May 1974 many people throughout the world were heartened by the announcement by the French President that the French would be reviewing and probably changing their policy of selling arms to insensitive, authoritarian and undemocratic regimes? Did my right hon. Friend have any detailed discussion on such matters with the President, especially in view of the British Government's commendable policy concerning arms sales to South Africa?

The Prime Minister: There is a difference between the policies of the French

and British Governments on this matter of the supply of arms. As we were seeking to build constructive relations on matters on which we can agree, and as I knew that I would not change the President's mind on this matter, I did not think it the appropriate occasion on which to raise it. But I think the President knows well that there is a difference in our attitudes.

Mr. Walters: Will the Prime Minister agree that if Europe is to be effective in the world there must be more progress in formulating a common European foreign policy? Will the Prime Minister agree that there are areas in the world where European initiatives are particularly called for? For instance, in view of the paralysis of Americal foreign policy at the present time, did the Prime Minister discuss with the President what Europe could do in the Middle East?

The Prime Minister: I am not sure that we are on all fours with the French Government in this matter. Probably our position is a little closer to that expressed by the hon. Gentleman, whereas I think the French Government may feel that sometimes the formation of a common foreign policy would lead to the lowest common denominator being accepted, and therefore to a position in which individual countries' policies would not be effective.
We discussed this matter at some length. I am sure that the President is anxious that we should co-operate. I think it enhances a national foreign policy if there is a European dimension to it, but if we co-operate there must be agreement between us all.
With regard to the Middle East, the French have a special position in the Lebanon, which the President has explained. My right hon. Friend the Foreign Secretary is in close touch with Dr. Kissinger about the Middle East. I do not think that Dr. Kissinger would accept—nor would I—that American foreign policy is in any way paralysed in its approaches in the Middle East. But I do not think that at the moment there is room for a separate European initiative.

Mr. MacFarquhar: Will my right hon. Friend say, on the question of direct elections, whether he and the French President were at least in agreement that


direct elections should be held in 1978, that they are of the utmost importance, and that both sides would be ready to make compromises in order to meet that deadline?

The Prime Minister: It is true that in December 1974 my right hon. Friend the Member for Huyton (Sir H. Wilson) and I agreed that we would try to work to 1978, but, as I have explained to the House on many occasions, the final decision rests with the House. I think the Government are bound to take this view and to ask Parliament to agree to 1978 elections. We would certainly use our efforts to achieve this if it is at all possible, although I recognise the difficulties of organisation, as well as legislation, involved in it.
Should there be compromises? I think that all these European matters demand compromise. They also demand a recognition of the particular problems of individual nations. We have a particular problem in that we have a constituency system. If the constituency system is to be meaningful, one must have a larger number of members than a country which votes on a national list, otherwise the relationship between a member and his constituency is so diffused as to be entirely wrong. I do not think we can compromise on that, but it is a practical issue of politics which has to be thrashed out.

Mr. Amery: I fully appreciate that there were no official discussions about NATO, but will the Prime Minister agree that co-operation with France in defence is of paramount important to the defence of all the interests that we and other European countries have together? Can the Prime Minister, as a result of his talks, hold out any prospect of improvement on that horizon?

The Prime Minister: I think there has been a constantly improving relationship over the last two to three years concerning France's co-operation in matters of defence. She has a particular reservation on the military structures of NATO, which is well known. The French President has said in his public utterances that he fully understands that France could not remain as an entirely isolated sanctuary if—as we all trust and hope will not happen—war were to break out on a wide scale in Central Europe. It is on

that basis that such discussions as we have in fact proceed.

Mrs. Millie Miller: Will my right hon. Friend bear in mind, if he is discussing the matter of fast breeder reactors with the French Government, the serious warnings which have been given, according to the Press, only this week at the energy conference about the increased use of nuclear power and the plutonium associated with it? Will my right hon. Friend bear in mind that we have vast supplies of other types of energy on which we would be well advised to draw before entering into massive campaigns to develop further nuclear stations?

The Prime Minister: Yes, I read Sir Brian Flowers' speech and thought that it was extremely impressive. I hope that my hon. Friend read my speech, in which I made reference to the vast reserves of energy that we possess.
There are dangers in the nuclear field of which this generation must be aware, and we must not visit the problems on our children. I hope that in all our co-operation with the French—and, indeed, with other countries—our appropriate Ministers and officials will keep that in mind.

Mr. Maxwell-Hyslop: Is the arrangement that the Prime Minister has just reported to the House that he will meet the French President once a year, or that the British Prime Minister will meet the French President, since the two are clearly not the same? One is in the national interest and the other is not.

The Prime Minister: The French President did not enter into the question of the British domestic electoral scene, but I have no doubt that I shall be meeting him, if he survives, for many years to come.

Mr. Bidwell: Did my right hon. Friend discuss the British dislike of the common agricultural policy and the prospects of changing it?

The Prime Minister: We did not discuss that on this occasion, although my right hon. Friend the Foreign Secretary has made clear in the Council of Ministers from time to time our attitude about this matter, and there will be serious discussion on the common agricultural policy before the next price review.

Mr. Biggs-Davison: Is there to be any permanent secretariat or special machinery to prepare and assist discussions between the Prime Minister and the President and between Ministers on the two sides of the Channel?

The Prime Minister: No. We thought that it would be better not to over-formalise it. There are already considerable bilateral contacts beween officials and, indeed, there are visits by Ministers. We wanted to regularise it and not to formalise it, and I do not think that we need additional machinery.

Mr. Palmer: Did the Prime Minister note the encouraging references by the French President to the Anglo-French Concorde project—a reference noted also in the Bristol area? What does my right hon. Friend feel are the prospects of such technological collaboration with France in the future?

The Prime Minister: It is too early to say. We must first make a success of the Concorde project. If there are to be future ventures of this sort, the financing and the participants in such a venture will need to be worked out. That will take some time.

Mr. Marten: At the beginning of his statement the Prime Minister referred, in what I am sure was a slip of the tongue, to Anglo-French relations. Could we not get into the habit of talking of British-French relations or of United Kingdom-French relations, because we must remember that there are others than Anglos?
Secondly, did the Prime Minister notice, as I did, that when the French President was speaking he sensibly used the phrase "European unity" and not the absurd term "European union"? Will the Prime Minister follow the precedent set by the French President and use the word "unity" rather than "union"?

The Prime Minister: Speaking as the Member for Cardiff, South-East, I can assure the hon. Gentleman that my constiuents have not the slightest objection to anybody referring to Anglo-French relations. If we are to recognise nationalist sentiments, let us recognise them in a sensible way and not destroy ancient terms that are a very useful custom. I do not think those in Cardiff

or anybody in Scotland will bother about the matter, and I must tell the hon. Gentleman that we shall go on referring to Anglo-French unity.
On the other point raised by the hon. Gentleman, we had some discussion about the general future of Europe. I do not think that our views and those of the French Government and their President are very far apart. I agree that the terminology is important, but it is the idea that is more important. I think that we shall find ourselves marching almost side by side.

Mr. Newens: I understand that my right hon. Friend on this occasion did not discuss the subject of the supply of arms to South Africa by the French Government, but does he not agree that, if there is to be a closer understanding with France, there must be co-operation in refusing to supply arms to racialist States?

The Prime Minister: We have our own policy on this matter, and that policy is supported by a number of other European countries and by our neighbours in the Community. It is not, however, supported by others. We must try to concentrate on the positive things on which we can construct a new relationship rather than to harp on the differences that we know that we shall not resolve.

Mr. Heath: Is the Prime Minister aware that I warmly welcome the arrangement for meetings between the two Heads of Government to be held on a regular basis? The very close Franco-British relationships which led to the successful negotiations for Britain's entry into the European Community were based on regular six-monthly meetings between President Pompidou and myself. I am glad that the two Heads of Government have at least been able to arrange regular annual meetings.
May I put a practical point to the Prime Minister? On the subject of technological discussions, does not the right hon. Gentleman agree that one of the most urgent questions for the two Heads of Government to discuss is the means of making an approach to the United States Head of Government, no doubt the next President, on the future development of supersonic commercial aircraft, and that there should now be a proposal that the


French and British should work with the Americans on the next stage of Concorde? Does he not agree that only in this way shall we obtain a return on investment already made and, furthermore, that there will be an economy in the use of Western resources by the Americans in that they will not have to go over all the ground we have already covered and in which progress has been made? It appears to me that this is an imaginative, practical approach by means of which the communities on both sides of the Atlantic can work together in each other's interests.

The Prime Minister: I have no doubt that the relationship that existed between M. Pompidou and the right hon. Member for Sidcup (Mr. Heath) contributed a great deal to Franco-British understanding at that time.
We discussed the question whether we should have six-monthly meetings, but both of us felt that they might become too much of a routine affair. After all, we meet each other now—as did not happen in the right hon. Gentleman's day—at the European Summit. It is as well that we should also discuss bilateral relationships. We shall see how the arrangement goes. We at least thought that a meeting once a year would be a good start.
I was asked about the possible relationship with the United States and its next President about the next generation of supersonic aircraft. I am no expert on that subject, although I try to follow the matter generally. The right hon. Gentleman will have noted that in a previous reply I said that we should have regard not only to Anglo-French relations but to the question of other participants and finance. There are a number of ideas that are, so to speak, not more than floating in the air at the moment about whether there should be a successor and, if so, how and when it should be begun. These ideas will be discussed at greater length, and no doubt will become more factual as time goes on.
There is one conclusion which I as a layman would like to draw, and I think that on this point I agree with the right hon. Member for Sidcup. I see no possible future for an Anglo-French aircraft on its own of that size or kind. It

would have to be built, if it ever were—and it may now be taken that that would be well into the eighties or nineties—on a much wider basis than an Anglo-French basis.

Several Hon. Members: rose—

Mr. Speaker: I shall allow two more questions to the Prime Minister. Mr. Hugh Jenkins.

Mr. Hugh Jenkins: The Prime Minister will be aware—and indeed he may have discussed this matter with the President—that originally there were 74 options on the Concorde, none of which has ever been taken up. Could not future technological co-operation with the French involve something that could be sold to other nations and not a piece of technology that consists in nations taking in each other's expensive washing? Is this not a venture involving an aircraft on which very few people can afford to fly, and will it not have great environmental disadvantages to everybody, other than those who are flying in the aircraft?

The Prime Minister: We did not have as long a discussion on Concorde as we are now having on this topic in the House. My hon. Friend will have noticed the caution with which I approach this subject. Nobody suggests that I am rushing into a new co-operative venture tomorrow, and the considerations advanced by my hon. Friend will be borne in mind.

Mr. Adley: Is the Prime Minister aware that most people welcome the determination which the Prime Minister shows in supporting Concorde, but does he not agree that the success of the aircraft may ultimately hang on what happens in New York? Can he assure the House that the British and French Governments will work in the closest possible harmony as we approach the final decision on this great issue?

The Prime Minister: Yes, Sir. There is no difference between us on this matter. I hope to use Concorde—and I hope the House agrees with this—when I go to Puerto Rico on Saturday with other Heads of Government and Heads of State.—[An HON. MEMBER: "Are you coming back on it?"] Yes, and I hope to return in it. I believe that, as the aircraft is there—whatever views we may


have held about it originally—we must make it a success.

Following is the Joint Declaration:

The President of the French Republic and the Prime Minister of the United Kingdom of Great Britain and Northern Ireland

Considering that their two countries share the same basic outlook and pursue common objectives;

Recalling that their two countries' membership of the same European Community creates new links between them;

Resolved to develop consultation and thereby to reinforce co-operation between their two governments;

Have decided to meet alternately in France and in the United Kingdom, once a year, accompanied by the members of their governments principally concerned, in order to discuss relations between their two countries and problems of common interest, notably those derived from their membership of the European Economic Community;

Have also decided that the Ministers of Foreign Affairs of France and the United Kingdom will have a separate meeting at least once a year;

Have decided to organise periodic meetings between the other principal Ministers, notably those responsible for Home Affairs, the Economy and Finance, Energy, Industry, Defence and Trade, with a view to bringing the policies of their two countries closer together and facilitating their convergence.

BUSINESS OF THE HOUSE

Mr. Speaker: Business Statement—the Lord President.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:

MONDAY 28TH JUNE—Supply [26th Allotted Day]: there will be a debate on child benefits, on a motion for the Adjournment.

Motions on the Iron Casting Industry (Scientific Research Levy) (Amendment) Order and on the Horticulture Capital Grant (Variation) Scheme.

TUESDAY 29TH JUNE—Consideration of the motion in the name of the Leader of the Opposition on the Aircraft and Shipbuilding Industries Bill.

WEDNESDAY 30TH JUNE and THURSDAY 1ST JULY—Remaining stages of the Education Bill.

FRIDAY 2ND JULY—Motions on Northern Ireland Orders relating to various emergency powers and the interim period extension.

MONDAY 5TH JULY—Supply [27th Allotted Day]: subject for debate to be announced later.

Mrs. Thatcher: May I ask the right hon. Gentleman about the debate set down for next Tuesday? I understand that that debate is meant to be a repeat of the debate held on 27th May. Therefore, if it is to be a true and fair repeat, the circumstances under which it is held ought to be identical. What arrangements does he propose to make to ensure that, in the event of a tied vote, the Bill will go to a Select Committee, as would have happened on 27th May?

Mr. Heffer: Stupid woman.

Mr. Foot: The right hon. Lady and representatives of the Opposition indicated to me last night the importance they attach to this subject, and they suggested a motion which would indicate what would happen, if it were passed and approved by the House, in the event of a tie. We were urged by the Opposition to consider this seriously and we gave serious consideration to the proposal.
I would suggest to the House how we might deal with it. We do not consider that the motion that was indicated by the Opposition is the right way to deal with it. I do not think that it is in my power to indicate, publish or state what the proposal was. If the Opposition wish to make that public they will do so. We believe that there are strong grounds of principle why that motion is not accepable. However, if the Opposition wish to press it, although we are prepared to discuss this matter through the usual channels, we would suggest that this motion should be discussed at the same time as the other motion on Tuesday next and that the votes on both matters should be taken at the end of the debate.

Mr. Fairbairn: On a point of order, Mr. Speaker. When my right hon. Friend the Leader of the Opposition made her request to the Leader of the House, the hon. Member for Liverpool, Walton (Mr. Heffer) described her as a "stupid woman".

Mr. Corbett: I second that.

Mr. Fairbairn: Is that parliamentary language, Mr. Speaker, particularly coming from an hon. Member who does not believe in any distinction between the sexes or apparently in distinctions between intelligence?

Mr. Speaker: It has long been indicated, far back in "Erskine May", in early editions, that courteous behaviour is required in the House, and the hurling of titles which one would not like to have thrown at one's self adds nothing to our debates.

Mr. Mellish: On the question of the debate on Tuesday next, in the event of what is called a tie, I believe that it would be proper, Mr. Speaker—although this is a matter for you alone—to decide according to precedent how you cast your vote and therefore to take the decision on that day. It is a known fact that if on the previous occasion the tie had remained on the second vote, you, Mr. Speaker, understandably, would have cast your vote against the Government. I do not see why there should be any difference on the next occasion, and if there is a tie it would be your decision, as Speaker of the House, that would resolve it.

Mr. Speaker: Let me say this to the House: first of all, no one dislikes ties more than I do. Secondly, Mr. Speaker is protected by precedents, and in all ties I follow the precedents as laid down by "Erskine May". I do not wish to be drawn any further into this argument this afternoon.

Mr. Maxwell-Hyslop: First of all, do the Government intend to suspend Standing Order No. 53 on Tuesday next or not? They have not yet said what they are going to do, but are they seized of the fact that unless they do so a debate cannot take place for it would last only 20 minutes before the Question was put?
Secondly, if the Prime Minister were in good faith in the statement he made to the House on Tuesday, it can mean only that the Government are themselves prepared to move a motion so that the vote of the Chair has the same effect on a tie as it would have had on the last occasion. Is the Leader of the House prepared to protect the Prime Minister's good faith by himself moving such a motion on Tuesday before the Order of the Day for recommittal is taken, or is he going to

betray his own Prime Minister as well as the House of Commons?

Mr. Foot: On the first question, it is our intention, of course, to suspend the Standing Order so that the debate can take place for the full day, to which we have indicated we would agree if the Opposition desired it. On the hon. Gentleman's second question, I repudiate any suggestion questioning the good faith of the Prime Minister, and what I have said in the House in response to the right hon. Lady's question is in my opinion the best way to deal with the matter.

Mr. Moonman: Would my right hon. Friend say when the Government intend to make a statement on the publication of their White Paper dealing with occupational pension schemes?

Mr. Foot: May I tell my hon. Friend, the right hon. Member for Wanstead and Woodford (Mr. Jenkin) and others in the House who may have been expecting a statement on the subject today that I apologise for any inconvenience caused to the House through the statement not having been made. The reason is time. We were seeking to protect the time of the House.
However, I can tell the House that the Government have today published a White Paper on this subject called "Occupational Pension Schemes: the Role of Members in the Running of Schemes"—Command Paper No. 6514. This White Paper will prepare the way for a public discussion on the issues involved. If the House and the hon. Gentleman wish a further statement to be made on this subject in the House tomorrow we shall be glad to agree to that, although of course the House will understand that there will be publication of many of the details in the newspapers today as a result of the announcement I have made.

Mr. Grimond: If we are to be kept strictly to the position of the last debate on shipbuilding, it will not have escaped the right hon. Gentleman's attention that by next Tuesday there will have been one major alteration, in that there will be a new Member in the House, although we do not know to which party he will belong. I take it that there will be no representations in the House to suggest that he should not vote and I take it


that the Leader of the House will expect him to be in the Division Lobby next Tuesday.

Mr. Foot: I am sure that all qualified Members will be able to vote.

Mr. Canavan: In view of the Labour Party manifesto commitment to redistribute wealth in favour of working people and their families, and in view of the thousands of homeless people, among them many young couples, who are on housing waiting-lists, may we have an early debate about the amount of public money that goes to the Royal Family, bearing in mind the privileged housing position of Captain Mark Phillips and his wife?

Mr. Foot: I cannot promise a debate on that general subject although there have been statements in the House on the wealth tax by my hon. Friend responsible for that matter.

Mr. Patrick Jenkin: In view of the statement we have heard from the right hon. Gentleman on the publication of the White Paper on occupational pension schemes, may I ask whether he recognises that it is very unfortunate that a Department should go ahead and release documents to the Press before the Cabinet has authorised the Secretary of State to make a statement, with the result that should the Cabinet refuse a statement the matter cannot be recalled? That is a very unsatisfactory way of proceeding. Would the right hon. Gentleman equally accept that in all the circumstances it would have been better if a statement had been made in the House tomorrow. This is an extremely controversial White Paper, giving the trade unions 50 per cent. representation on occupational pension schemes, an issue on which very strong views will be held.

Mr. Foot: We think that it is an important matter and would certainly have wished for a statement to be made to the House today. Certainly, we have nothing to hide and everything to boast about. However, we wanted to protect the time of the House and the time of the Opposition, as well as the time of others in the House. But I believe that what I have said can help the House in the circumstances. I apologise for the fact that there has been no statement.

Mr. Jay: Has my right hon. Friend seen the recommendations of the Select Committee on Direct Elections to the European Economic Community—that this subject should be debated in this House before any decisions are taken on 12th July? Will he give the House an assurance on that?

Mr. Foot: I accept fully that this is a very important matter and that it must be debated in the House. I am afraid that I cannot give any indication about when that will be. I have noted carefully my right hon. Friend's representations on the matter.

Mr. Peyton: May I ask the Leader of the House when the Government expect to receive the report of Sir Douglas Allen's inquiry? Will the right hon. Gentleman undertake to make a statement by Thursday of next week at least about the position reached by that inquiry, since its present very leisurely progress hardly matches the concern which is felt in Parliament and in the country?

Mr. Foot: I cannot accept any comment about the alleged leisurely progress of the inquiry. I am sure that Sir Douglas Allen is making his inquiries with the utmost possible dispatch. Therefore, I do not think that anyone should reflect upon that. I cannot give an absolute guarantee that we shall be able to make a statement by next Thursday, although the right hon. Gentleman framed his question in a very helpful manner in the sense that he asked merely for a statement by next Thursday indicating the possibilities of a statement in the future if we have not reached the possibility of a statement by then.

Mr. Peyton: I am grateful for the right hon. Gentleman's acknowledgment that my request was a modest one. But I must press him. The Opposition also have rights in this matter. I do not think that the Government can afford to be as dilatory as they are being. I hope that the right hon. Gentleman will give the undertaking for which I asked, otherwise the House will be obliged to seek other remedies.

Mr. Foot: I cannot accept that the Government are being dilatory. Nor am I prepared to accept any reflection from the right hon. Gentleman on the way in which


this high civil servant is conducting his inquiries. I cannot accept any of the right hon. Gentleman's suggestions. His original question asked me whether I would consider making a statement by next Thursday about the stage which matters had then reached. I will consider that, but I cannot give any guarantee that we shall be able to make a statement by next Thursday about the conclusion of the inquiry.

Mr. Peyton: rose—

Mr. Flannery: On a point of order, Mr. Speaker. In view of the fact that many hon. Members are waiting to raise matters with the Leader of the House, must this dialogue go on endlessly?

Mr. Speaker: Again, it is a long-established custom, if a matter is about to be cleared up between the two Front Benches, to allow it to be cleared up, and then we can get back on to the other business.

Mr. Peyton: I asked the Leader of the House not "to consider" but "to give an undertaking". In the circumstances, I feel that it would be right at the proper moment today that I should seek the leave of the House to move the Adjournment under Standing Order No. 9.

Mr. Hugh Jenkins: My right hon. Friend will recall that it is nearly four weeks since we started on the Second Reading of the Public Lending Right Bill and that there has been an interval of two weeks since we last discussed it. We have still not completed the Second Reading, and my right hon. Friend has taken it off tonight, when it was to have taken place. I did not hear it included in next week's business. Is there any precedent for a measure which is not opposed by the Opposition being treated in this churlish fashion? Has it anything to do with the fact that at present we have no Minister in this House who is responsible for the Bill, since he is elsewhere?

Mr. Foot: It has nothing to do with that last matter adduced by my hon. Friend. I am sure that there are precedents for the situation which he suggests. I am extremely sorry that the matter had to be taken off the business for tonight. But I am sure that when the House sees the business that we wish to get through

today it will understand the reasons for that. There is no intention on the Government's part to abandon the Bill. We intend to proceed with it, I promise.

Mr. Molyneaux: With regard to the Northern Ireland business next Friday, will the Leader of the House consider taking the two items in reverse order, and will he indicate whether he is prepared to recommend the suspension of the rule on that day?

Mr. Foot: Certainly I will consider what the hon. Gentleman has put to me. If it is for the convenience of right hon. and hon. Members generally, and those from Northern Ireland particularly, to reverse the order, I shall be happy to do that. I will consider suspending the rule. I should not like to give an absolute promise now. But we gave such an undertaking when it was requested on an earlier occasion and it assisted the House considerably. We shall consider it in that sense.

Mr. Greville Janner: May I draw my right hon. Friend's attention to Early-Day Motion No. 433 in my own name and that of my hon. Friend the Member for Preston, North (Mr. Atkins), which has been signed by 75 other Government supporters, calling for the retirement age for men to be reduced to 60? Can we look forward to an early debate on this subject, which is seen to be one of great importance in the House and in the country?
[That this House calls for the voluntary retirement age of men to be reduced to 60 years.]

Mr. Foot: This is a matter of general interest to the country at large, of course. Certainly I do not wish to discourage the general debate about it, but I am afraid that I cannot promise an early debate on the subject.

Mr. du Cann: Is the Leader of the House aware that there has also been published today, in addition to the occupational pensions White Paper, the Third Report from the Select Committee on Public Accounts? In view of the widespread interest on both sides of the House in the matter of public expenditure, which goes not only to the volume but also to the quality of expenditure, will he promise a day for an early debate, bearing in


mind that that would enable some of the rumours which are circulating about the Government's intentions in this regard, and which are causing much anxiety, to be dispelled? Does not the right hon. Gentleman think that, as the right hon. Member for Battersea, North (Mr. Jay) indicated, there is much virtue, when this House sets up Select Committees, in arranging prompt debates on their reports?

Mr. Foot: Of course, I agree with the general principle that it is very desirable that, when Select Committees and other Committees report to the House, we should have debates as soon as we can. But I am sure that the right hon. Gentleman is fully aware of all the difficulties, especially at this season of the year, in satisfying all these demands. I cannot give him the promise of an early debate, although I have no doubt that these matters will figure prominently in some of the other debates which will be taking place in the next few weeks on the Finance Bill and so forth.

Mr. Kinnock: Is my right hon. Friend aware that there is growing concern about the apparently increasing amount of racial intolerance and racial activity in the country following the malevolent reporting of the Malawi Asians' hotel stay, the speech of the right hon. Member for Down, South (Mr. Powell), and the leaking of the Hawley report, which has not had the same coverage as last week's business, and that consequently many hon. Members feel that it is time for a debate on the subject so that the House can bring to bear its well-known tolerance and skill at lowering temperatures?

Mr. Foot: I appreciate my right hon. Friend's views on the subject, and I am sure that the House is concerned about them. Whether it is best to do it in a debate solely on that subject is another matter, and, as I have said already, we have these difficulties about time. But there is a Bill passing through Parliament which is designed to assist in this matter. That will be coming back to the House. When it does, there will be an opportunity for some debate.

Mr. Montgomery: Why did it take almost a month to get the report on the vote of 27th May which was disputed? Is there any significance in the fact that the Prime Minister made his statement

on Tuesday, that we have the Rotherham by-election today, and that we are to take the disputed vote again next Tuesday? If we are to have a replay under exactly the same conditions, how can that possibly be achieved if there will be an additional Member present when the disputed vote is taken again?
Referring to the remarks of the hon. Member for Bedwellty (Mr. Kinnock), may I add a plea from the opposite direction? When shall we have a debate on the Hawley report on immigration, because I am sure that the hon. Gentleman and the Home Secretary display a complacency which is not shared by the overwhelming majority of the people, who are deeply disturbed by the rate of immigration?

Mr. Foot: I think that I have already dealt with the first matter raised by the hon. Gentleman in answer to questions from the Leader of the Opposition and the right hon. Member for Orkney and Shetland (Mr. Grimond).
In reply to the hon. Gentleman's second point, I can assure him that there is no complacency by my right hon. Friend the Home Secretary on the subject. We wish to see the legislation that we have on the subject passed through this House as effectively as possible, and that will also provide an opportunity for the House to comment on these matters.

Several Hon. Members: rose—

Mr. Speaker: If possible, I want to include all those hon. Members who still wish to raise matters with the Leader of the House. Will hon. Members please try to help me by keeping their questions right to the point?

Mr. James Johnson: Can the leader of the House tell us when we are likely to get the long-awaited statement about fisheries policy and would he take note that all the Labour Members who represent fishing ports hope that there will be some statement about decasualisation of the work force?

Mr. Foot: I note the representations of my hon. Friend on the latter subject but I do not imagine that we can solve that before the end of July. As for a general statement on fisheries policy, I will make representations to my right hon. Friends the Foreign Secretary and the Secretary


of State for Agriculture, Fisheries and Food to see whether a statement can be made.

Mr. Wigley: May I draw the attention of the Leader of the House to Early-Day Motion No. 465 concerning the need for an economic plan for Wales?
[That this House notes with dismay the fact that the Welsh Office neither have an economic plan for Wales at present nor have any intention of developing such a plan; believes that there will be no solution to the problems of unemployment, depopulation and limited job opportunity until such a plan is drawn up and acted upon; fears that the Welsh Development Agency is doomed to work in a vacuum in the absence of such a strategy; and condemns the Secretary of State for Wales for his appalling complacency in regard to the economic development of Wales.]
In view of the serious economic situation in Wales, could he arrange for a debate possibly by means of the annual Welsh day which is due before the end of the Session?

Mr. Foot: I am fully aware that there is an annual Welsh day debate. I have participated in it on some occasions, although I recall that it does not always take place before the end of the Summer Recess. However, I recognise the importance of the matter.

Mr. Flannery: In view of the recent terrible events in South Africa, and the fact that the South African Government are now shooting down large numbers of people, and that this could deepen, and in view of the circumstances of South Africa generally, would my right hon. Friend seriously consider allowing time for a debate on the subject? If he cannot manage that, would he seriously consider asking the Prime Minister to make a full-scale statement on events in South Africa?

Mr. Foot: I recognise how strong the feeling is among many of my hon. Friends who have come on deputations to me on the subject during the week, and a statement is being made in response to a Question put down by my hon. Friend the Member for Bedwellty (Mr. Kinnock) today. I am sure that the House will be aware that the Foreign and Commonwealth Office issued a statement on 17th

June dealing with events in South Africa. The House will also be aware that we supported the United Nations Security Council resolution on 19th June which deplored the unacceptable racial policies of the South African Government and condemned the massive violence used against inhabitants of African townships. Our representative at the United Nations made a statement to the Council, and I recommend my hon. Friends to read it. I fully accept what my hon. Friend says about the importance of this subject even though, I am afraid, I cannot promise a debate.

Mr. Marten: On the question of eviscerated chickens, will the Leader of the House tell us when the regulations or orders, or whatever, will be laid and will he promise to give the House an opportunity to reject them them?

Mr. Foot: I cannot say when, but I am sure that the hon. Gentleman, when the occasion does arise, will take every opportunity available to him.

Mr. Loyden: May I draw my right hon. Friend's attention to Early-Day Motion No. 467 on the Oakes Report?
[That this House expresses its concern that during the coming winter months there will be further disconnections of electricity and gas supplies to the aged and low income families; and therefore calls upon the Government to give time for the House to debate the Fuel Payments Review (Oakes Report) before the Summer Recess.]
May I remind my right hon. Friend that if this matter is not discussed before the Summer Recess, it will be at least October or November before any consideration is given to the report? In view of the urgency of this—it will mean that there is no decision on disconnections before the coming winter months—will my right hon. Friend promise a debate on this subject before the Summer Recess?

Mr. Foot: It is difficult to promise a debate on the matter, but I recognise its importance and I will ensure that my hon. Friends responsible will see whether a statement can be made to the House. In any case, I am sure that the importance of it has been represented to them by the motion on the Order Paper

Mr. Michael Morris: May we have a debate on the water industry, particularly in view of the very worrying water shortage?

Mr. Foot: I agree that, in many respects, it is extremely worrying and I will make representations to my hon. Friend to see whether a statement can be made next week on the matter.

Sir G. de Freitas: Will my right hon. Friend note that my motion on the water shortage has been signed by Members from both sides of the House? Will he also note the unusual wording of the motion in that it calls upon the Government and the Opposition to get together to provide time for a debate on this serious national problem?
[That this House, being aware that the shortage of water in the East Midlands presents serious problems, both long term and short term, requests Her Majesty's Government and Her Majesty's Opposition to provide an opportunity for debating the Government's Green Paper of March 1976.]

Mr. Foot: I recognise the importance of the whole subject and I would never stand between both sides of the House getting together to provide more time for us to discuss this question. However, even if we did get together, we could not provide more time than is available.

Mr. Eldon Griffiths: May I ask the Leader of the House whether he has seen Early-Day Motion No. 454 on the subject which my right hon. Friend the Member for Yeovil (Mr. Peyton) raised this afternoon from the Front Bench?
[That this House, noting the statement of the Minister chiefly responsible for information that Her Majesty's Government is now characterised by "the conscious and premeditated leaking of high level decisions", views with concern the prospect that private individuals, companies and allied governments no longer can be sure that private information provided to Ministers and civil servants will remain confidential; requests the Prime Minister forthwith to endorse or repudiate his colleague's statement; and calls on him to establish a Tribunal of Inquiry with terms of reference that include the general charges made by the hon. Member for Rugby, the operations

of the Official Secrets Act and the relevant activities of Special Advisers to Ministers.]
May I ask the right hon. Gentleman to take more seriously, and with a greater degree of urgency, the fact that the Minister primarily responsible for information in the Government has told all those citizens from whom confidential information is abstracted, and many of the companies which are required by law to provide confidential information to the Government, and those allied Governments who share their secrets with us, that the leaks of his Government are conscious and premeditated. Until this matter is cleared up there can be no confidence among allied Government, or private companies, or individuals, that they should share their information with the Government. It is, therefore, a matter of most urgent national interest and should be dealt with expeditiously.

Mr. Foot: I cannot offer any time for discussing the hon. Gentleman's motion. Indeed, I thought that the questions from the right hon. Member for Yeovil (Mr. Peyton) dealt with a different matter. I do not think that the two matters should be muddled up together.

Mr. Spearing: Does my right hon. Friend recall that on the evening of 10th June the House did not reach decisions on either of the two educational motions before it? Will he re-table the one about the directive on migrant children, on which there is no disagreement? Has my right hon. Friend noted that the one concerning the resolution passed by the Council of Ministers, according to the Secretary of State for Education as reported in column 1850 on 10th June, has no status under the treaty? Will he confirm that he will not re-table that matter?

Mr. Foot: What happened on the night of 10th June is seldom absent from my thoughts. I will consider again what occurred and see how best we can sort out the resolutions which my hon. Friend wishes to discuss again from those which he is determined not to discuss.

Mr. Kenneth Lewis: If we cannot have a debate on Government expenditure next week, may we have a statement from the Chancellor telling us how he proposes to persuade Socialist councils to keep


their expenditure under control when we have the Chairman of the GLC, Mr. Tony Banks, stating that there should be a subsidy to Chelsea Football Club? In view of that kind of situation, how will the Government keep their expenditure down?

Mr. Hugh Jenkins: On a point of accuracy, Mr. Speaker, Mr. Banks is not Chairman of the GLC and spoke entirely on his own behalf.

Mr. Speaker: I do not care what he is. I wish hon. Gentlemen would put their questions succinctly.

Mr. Foot: From what I saw of Chelsea last season, particularly when they were performing against Plymouth Argyle, it will take more than a subsidy from the GLC to put matters right. These are matters which will figure prominently in the debates we shall have both on the White Paper on inflation and on the Finance Bill.

Mr. Molloy: In view of the increasing amount of EEC legislation and its effect on the people of this country, and in view of the fact that on all sides of the House we are unhappy at the present manner in which we discuss it, will my right hon. Friend consider, in the not-too-distant future, giving the House an opportunity to debate the issue so that we can indicate in which way we think we ought to deal with these propositions and decisions of the EEC?

Mr. Foot: We discussed this matter a few weeks ago and I promised then that I would prepare and present to the House in some form, I would hope before the recess, an indication of how the Government think we should deal with this business in future. I do not say that our solutions will be perfect but they will take into account representations made in that debate. I recognise that this matter is of the first importance for the future of the House.

Mr. Tom King: Since Mr. Speaker is clearly bound by precedent and it would be wrong for either side to seek to involve him in this argument, is it not clear that the only way in which the matter of the vote on Tuesday will be resolved is if the Government are prepared to move their own motion? If not, we have the

situation described by my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery), that the Government will add one further vote to their side and will also now have the possibility of the casting vote in their favour. Since the Leader of the House appeared to imply that his proposal improved the situation, will he confirm that in both situations that he has described it is his intention that the casting vote will be with the Government?

Mr. Foot: I do not make decisions about the casting votes. Mr. Speaker makes those decisions. I agree that neither side of the House nor any section of it should seek to involve Mr. Speaker. These matters are of course perfectly fitting for discussion on Tuesday. That is a better way of proceeding than by way of answer now.

Mr. Madden: My right hon. Friend will remember that two statements have been made to the House about the establishment of an inquiry into the dangers of asbestos and that 150 hon. Members called for any such inquiry to be conducted wholly in public. As the inquiry has announced today that its proceedings are to be held almost entirely in private, will my right hon. Friend arrange for a statement so that the House can reaffirm its views? Will he agree that unless this inquiry is persuaded to change its view and to hold its proceedings in public, it will stand condemned in the eyes of most members of the public as a cover-up of the dangers of asbestos?

Mr. Foot: I certainly would not agree to condemn the inquiry in advance and I would not accept that it was intended in any way as a cover-up. However, I will discuss with the Secretary of State for Employment whether a further statement on the subject should be made next week.

Mr. Beith: Has the right hon. Gentleman considered whether we could proceed next week to deal with the unanimous recommendation of the Committee of Selection that one of its vacancies should be filled from among the minority parties?
In view of the conference which is taking place this week, may I draw the right hon. Gentleman's attention to Early-Day Motion No. 109, in the name of my hon. and learned Friend the Member for


Montgomery (Mr. Hooson), which has over 230 signatures from Members of all parties about the conservation of whales, which could be the subject of a short debate in the near future?
[That this House is of opinion that the Government should impose a ban on the import of sperm whale products into this country and take all other practical steps to impose a moratorium on whaling for a period of 10 years as an essential conservation measure of great importance to mankind in general.]

Mr. Foot: It is true that the Committee of Selection has reported, I think very fairly, agreed recommendations to the House. I should like to know the views of the Opposition on this matter. If they concur in those recommendations we should be very eager to recommend to the House that they should be accepted.
I cannot promise a debate on the second subject, but I certainly accept what the hon. Gentleman says about the great public interest in this matter and the importance of our contributing to a debate which may have some effect on it. Therefore, I do not rule out all possibility of it. I should like to find time for such an important matter, but the time just is not available.

Mr. Ashley: Is my right hon. Friend aware that two important reports require urgent Government consideration? The first is the Heilbron Report, of which he may have heard, on the law relating to rape. There is a Bill before the House which has been filibustered almost out of existence in a most irresponsible fashion. May we have an assurance that my right hon. Friend will find time for that Bill? The second report is the Phillimore Report, which deals with contempt of court and, significantly, furthers the freedom of the Press. Could he find time for that to be debated as soon as possible?

Mr. Foot: On the second matter, once again, despite the importance of the subject, I cannot promise any debate on it. However, I hope that, when the House meets again later in the year, we shall be able to consider it. Eventually, of course, we may have legislation on this subject. That is what would be required

if parts of the report were to be made effective.
On the first matter, again I recognise how many of my hon. Friends are concerned about the Bill and about the treatment that it has had in the House when it has returned here. There is still another day for Private Members' time. Let us see how we proceed then. However, I recognise the strength of the representations which are being made to me on the subject.

Mr. Fairbairn: When shall we be able to debate the report, which I think was issued yesterday, which recommends that we should build a little box in the corner of the Chamber for broadcasting at a cost of £38,000 and another in the House of Lords at a cost of £30,000 and that this should be done during the recess? At such a time of public expenditure restriction I should be obliged to know when we can debate this matter.

Mr. Foot: I, too, should like to debate that subject, and I think that the House should debate it if we are to get the work done during the recess. I am strongly in favour of that happening. Indeed, it was the express will of the House that we should proceed as swiftly as possible to do this. However, to get precise instructions we should have to have another debate.

Mr. Prescott: May I impress on my right hon. Friend the urgency of a statement next week of a commitment to the ending of decasualisation in the fishing industry and denying benefit to shipowners who are already laying down ships before the terms are announced? Secondly, would my right hon. Friend give attention to the deplorable fact that there is no appointed doctor or State registered nurse for the 4,000 staff and Members of this House, especially in view of the fact that 10 Members required medical attention this week?

Mr. Foot: I cannot promise a statement on fisheries policy next week, but I know how strong are the feelings of my hon. Friend and others on this matter. I will make representations to my right hon. Friends to see whether we can have a statement next week, but I cannot promise that. I know that there must be a statement on general fisheries policy fairly early.
On the second question, my hon. Friend and my hon. Friend the Member for Southampton, Test (Mr. Gould) approached me yesterday, particularly in view of the events yesterday, and made representations to see whether something could be done on the lines that my right hon. Friend has now suggested. I think that most hon. Members would recognise the common sense and the common humanity of what he said. We are therefore looking at the matter urgently.

Mr. Tim Renton: Will the right hon. Gentleman find time for a debate on the second edition of the highly inflationary social contract before it becomes the law of the land?

Mr. Foot: All these matters can be debated in the financial and economic debates that I have announced. I do not, of course, accept any of the pejorative phrases that the hon. Gentleman has used.

Mr. Madel: Would the right hon. Gentleman look again at next week's business in relation to the likely length of this Session? Instead of grinding on into August and threatening to bring us back in September, would it not be better to extend the Session until Christmas so that we can have more time to consider the legislation and then if necessary have an 18-month Session starting in January 1977? Why is there always such a rush at this time of year? Surely it is time to change these things.

Mr. Foot: All such reasonable possibilities are always considered by Leaders of the House. They do not always reach the same conclusions, but such possibilities have not escaped our attention. However, no decisions have been made as to when this part of our discussions will end or when the Session will end or how we are to proceed. What we are determined to do is ensure that the essential legislation will reach the statute book.

Mr. Heffer: On a point of order, Mr. Speaker. While the Leader of the Opposition was speaking earlier, at the end of her remarks I made what I now regard—without pressure from the Whips or anyone else—as an offensive remark. I regret it and I unreservedly withdraw it.

Hon. Members: Hear, hear.

Mr. Speaker: I am very much obliged to the hon. Member. What he has said helps the rest of the tone of the House.

CABINET DOCUMENTS (DISCLOSURE)

Mr. Peyton: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the Government's refusal to promise even an interim statement next week on the progress made by Sir Douglas Allen's inquiry into the leakage of Cabinet papers.
It is quite unnecessary for me to rehearse at any length the facts of the situation. I would only remind the House that just now, when I put to the Leader of the House what he himself described as a modest request for the promise of a statement by next Thursday at the latest—in other words, within two weeks of the Prime Minister's statement setting up the inquiry—the best he could say was that the Government would consider the possibility of making a statement.
The House has been patient. All that we have to go on at the moment is a series of Press reports which indicate leisurely progress in what is an urgent and important matter. Therefore I hope, Mr. Speaker, that you will give me the leave for which I respectfully ask.

Mr. Speaker: The right hon. Member has asked leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the Government's refusal to promise even an interim statement next week on the progress made by Sir Douglas Allen's inquiry into the leakage of Cabinet papers.
I have listened very carefully to the arguments. I am satisfied that the matter raised by the right hon. Member is proper to be discussed under Standing Order No. 9.
Has the right hon. Gentleman the leave of the House?

The leave of the House having been given—

Mr. Speaker: The motion for the Adjournment of the House will now stand over until the commencement of public business on Monday next week, when a debate on the matter will take place for three hours.
The motion stood over under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) until the commencement of public business on Monday next.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 12th JULY

Members successful in the Ballot were:
Mr John Hunt
Mr. Norman Lamont
Mr. Dudley Smith

Mr. Speaker: May I say that the numbers were drawn by the Clerk.

BUSINESS OF THE HOUSE

Motion made, and Question proposed,
That the Third Reading of the Development Land Tax Bill may be taken immediately after consideration of the Bill, notwithstanding the practice of the House as to the interval between the stages of Bills brought in on Ways and Means Resolutions.—[Mr. Graham.]

Mr. Powell: May I take the opportunity of this motion to remind the Leader of the House—I am sorry that I must do so in his momentary absence—that his predecessor in that position indicated that he thought that the desirability or necessity of motions of this kind was a matter which might properly be considered by the Select Committee on Procedure? As the Select Committee on Procedure has now been set up, I wanted to place it on record that that view had been held and to express the hope that a remit will be promptly made.

Mr. Baker: I support what the right hon. Member for Down, South (Mr. Powell) has said.
May I welcome the fact that the Government have not moved the business motion in the terms that we read on our Order Paper this morning. I expect that many hon. Members were surprised to read that motion, which would have had

the effect of guillotining discussions on the Development Land Tax Bill at 7 o'clock this evening.
The House may deem it unacceptable if a procedural motion of that kind is put down in the early hours of the morning and hon. Members first read the Order Paper at 8 a.m., 9 a.m., or 10 a.m. and realise that a surreptious guillotine has been introduced. There is a well-established procedure for the introduction of guillotines. Governments of the day may always use the option of a guillotine to get their business through. There is the procedure of the three-hour debate, with hon. Members on all sides being given plenty of time to consider the matter and to reflect whether they should support the guillotine.
It is not acceptable for a motion such as this to appear on the Order Paper. I think that it was unwisely conceived, but wisely abandoned. When we are trying to restore the normal arrangements of the House, a motion such as this cannot help towards that end.

Mr. Fairbairn: In speaking to this motion I wish to raise certain matters which seem to me of major constitutional importance. Even this restricted motion—which asks that the Third Reading of the Development Land Tax Bill may be taken immediately after the consideration of the Bill, notwithstanding the practice of the House—makes into a matter of complete hypocrisy any assurance which the Government gave us through the mouth of the Minister, on matters which we have so far debated on Report.
The Minister said that he would be willing, although giving no undertaking, to reconsider the matter. What does he mean by that? This is a financial Bill. It cannot go to the House of Lords. There are no further stages. There will be no other opportunity for us to put down an amendment. The putting down of this motion is offensive to democracy and the constitutional practice of the House.
The Government are unable to fulfil their word. If we discover in the course of our further discussions that clause after clause is wrong, the Government will have no opportunity to put them right. It seems to me that the Government are not interested in the form that their legislation will finally take.
Let us have the Bill. The fact that it is unfair, illegal or wrong does not matter. But we are being asked to subscribe to a motion which makes it impossible to correct the Bill even if members of the Government or the Opposition take the view that it should be corrected. For that reason I think that this motion is thoroughly unconstitutional and undemocratic. It should never have been put down in the name of anyone—far less that of the Prime Minister, who boasts that he is interested in fairness.

Mr. Fletcher-Cooke: I rise on what I think is a point of order, Mr. Speaker.
As I understand it, only half of the motion has been moved. I ask you, Mr. Speaker, whether we may amend in that way a motion that is placed on the Order Paper. Surely if certain words are put down on the Order Paper, the only way they may be amended is by means of a manuscript or some other amendment being moved that certain words be omitted from the motion—otherwise we might alter the sense of the motion completely and not merely reduce its effect. By stopping, for example, before the word "not" it may be possible to reverse the sense. Surely if an hon. Member puts a motion down on the Order Paper it must either be passed in its entirety or rejected in its entirety—or the amended motion may be passed or rejected.
If a motion is put down, surely we may not put to the House only one or two of its words, thereby amending the motion and without giving the House a chance to discuss the amendment.

Dr. Glyn: Further to that point of order, Mr. Deputy Speaker. I entirely agree with the sentiments expressed by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). However, I believe that although it is possible to proceed in the manner proposed under the procedure of the House, that is highly undesirable.
If the truncated motion goes through, what happens to the Bill on Report? Does the discussion continue until 10 p.m., or does the motion to suspend, and to allow other business at 10 o'clock, allow the orginal motion—which is a motion on the Development Land Tax—to continue to any hour? I do not understand it.

We are departing from the words that are printed on the Order Paper.

Mr. Deputy Speaker (Mr. Oscar Murton): Perhaps I can help the hon. Gentleman. I shall take the latter part of his remarks first. This is exempted business, being a finance matter. As for the question of alteration to a notice of motion, "Erskine May" refers to this appositely under the heading of "Complicated Questions". It is said:
The ancient rule that when a complicated question is proposed to the House, the House may order such question to be divided, has been variously interpreted at different periods.
This motion is competent and it is within the rules of order.

Mr. Fletcher-Cooke: Further to that point of order, Mr. Deputy Speaker. I can well understand that the House should order that a complicated Question be split into two simple Questions. The House can order anything it likes. But the House has made no order whatever. That is my point.

Dr. Glyn: Further to that point of order, Mr. Deputy Speaker. If this is a truncated motion, as the Government wish, until what time may the Bill be debated? Does the debate stop automatically at 10 o'clock or does it go on?

Mr. Deputy Speaker: The debate is open-ended.

Mr. Powell: Further to that point of order, Mr. Deputy Speaker. Would you address yourself to the point made by the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) who has pointed out that the citation from "Erskine May" does not appear to be apposite to the moving of part of a motion on the Order Paper? It appears to indicate that it is competent for the House to order that such a motion shall be divided and, therefore, if the Prime Minister had moved that the motion on the Order Paper be divided that, presumably, would have been the proper way to proceed.

Mr. Deputy Speaker: I am advised that the Member who moves the motion can take this action and it can be divided.

Mr. Tebbit: Further to that point of order, Mr. Deputy Speaker. You may well be advised correctly that such action can be taken. The point is that that


action has not been taken. There is no motion before the House to divide the motion on the Order Paper. If the procedure is as you understand it—and we accept that this is a complicated matter and that you may want to adjourn the House for a short time to consider it further—what we need is a motion to split the motion on the Order Paper, otherwise we could get ourselves into a terrible tangle if the business which appears on the Order Paper is not moved from time to time and other business is moved instead without a motion. Would it not be wise for the House to adjourn for a few moments while consideration is given to how we can get out of this procedural muddle?

Mr. Deputy Speaker: The Question was proposed to the House and it was passed without dissent. [HON. MEMBERS: "No."] May I amend that? The Question was proposed and the House did not at that point signify its displeasure.

Mr. Baker: Further to that point of order, Mr. Deputy Speaker. When the motion was read by the Government Whip, two Members on the Opposition side of the House, the right hon. Member for Down, South (Mr. Powell) and I, rose to raise points. Subsequently a point of order was raised by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). It seems from the passage that you have read out from "Erskine May" that the correct procedure has not been followed by the Government.
You have subsequently advised that there is a precedent for this. I wonder whether you could tell us what the precedent is. I think it is the recollection of all of us that the moving of only half a business motion by the Government has not happened recently. May I suggest a way out for the Government? The purpose of this motion lay in the sting in the tail, which the Government, quite wisely, are not moving. It would be sensible for the Government to realise that the first part of the motion will not save very much time. It may be a way out of the problem for the Government to withdraw the first part of the motion.

Mr. Powell: Further to that point of order, Mr. Deputy Speaker. Might I recall to your memory a recent occasion on which there was a motion proposed by

the Government on a matter concerning EEC legislation? It was on the Order Paper in a form which the Government had not intended and did not wish to be approved by the House. Nevertheless, it was held at that time that it was necessary for the Government to move the motion as it stood on the Order Paper and then that an amendment thereto should be moved and accepted by the House.
If that is not so, and it is competent for the Minister in charge of a motion to move it in a different form from that in which it stands on the Order Paper, I suggest to you that a most important ruling is being given and that you may wish to consider withholding your judgment upon this matter, if you are unable to give it immediately, in view of the great importance and ambit of any such ruling.

Mr. Fairbairn: Further to that point of order, Mr. Deputy Speaker. It is important to remember that the Order Paper is not something which is just printed to absorb public expense. It has a purpose. What we have on the Order Paper is notice of which motions will be moved. That is why it is headed "Notice of Motion". We do not have on the Order Paper "Notice of the sort of thing that somebody may move if they choose—or a bit of it." It is a notice of something that is to be moved and nothing else. It is there so that the House can decide what attitude it will take. It gives us time to consider the case and the merits of the matter to be moved. It is not giving us time to guess about what somebody may move if he feels like it. The fact that there is the heading "Notice of Motion" indicates that it is a motion—or nothing.

Mr. Deputy Speaker: Perhaps I could point out to the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) that the motion is in two parts. It is the second part which has been deleted. Similar circumstances arise with 10 o'clock motions when only parts are approved.

Mr. Eldon Griffiths: Further to that point of order, Mr. Deputy Speaker. With respect, you used the word "deleted". That implies, as I understand it, that some person—

Mr. Deputy Speaker: Order. May I amend that, if the hon. Gentleman will allow me? I should have said "not moved" rather than "deleted".

Mr. Eldon Griffiths: In that case we are in the presence of notice of half a motion or notice of motion only half of which the Government have seen fit to move. Is that the position as you understand it, Mr. Deputy Speaker?

Mr. Deputy Speaker: That is correct.

Mr. Eldon Griffiths: In that case, may I ask you to take seriously the suggestion of the right hon. Member for Down, South (Mr. Powell)? It would be a serious situation if, by your ruling, or your interpretation of the rather murky advice that seems to have been offered, you were to create a precedent whereby in future Notices of Motions on the Order Paper might mean only that some part of the motion would be pursued. I suggest that this would be a serious matter for all future Parliaments.
Imagine the situation in which whatever the Government or anyone else put on the Order Paper would in no sense mean that that was actually the business. It would depend on which part of the motion—the beginning, the middle or the end—the author chose or did not choose to move. That would make for chaos in the House. May I suggest that the proposal of the right hon. Member for Down, South should be followed, and that you, Mr. Deputy Speaker, should consider this matter, and make a ruling at some other time?

Mr. Deputy Speaker: I suggest that the best way to handle this matter is to take the normal course. This motion is debatable, and I suggest that the House debates it.

Mr. Tebbit: On a point of order, Mr. Deputy Speaker. The essence of this is that before we begin a debate on the matter which is on the Order Paper, we should know exactly what it is we shall be called upon to vote on at the end of the debate. Therefore, we must decide before we begin the debate what is the Question before the House. The section you have drawn upon—

Mr. Deputy Speaker: Perhaps I could help the hon. Gentleman here. A Question was proposed in its divided form.

Mr. Tebbit: This is the point to which I was coming. The section of "Erskine May" on which you leaned refers to the division of a motion. It does not refer to dropping one part of a motion. This can be seen clearly from the fact that it refers to the necessity of each part of the motion which is to be divided being able to stand on its own. If it is for the convenience of the House that a complicated motion is dealt with in two parts, then provision is made to divide it into two parts so that each part can be voted on.
There is, as far as I can discover, no provision for part of a motion to be dropped off the end of what is on the Order Paper. That is what the Government have attempted to do. They have dropped one part of the motion on the Order Paper, and moved what is, in effect, a different motion. If the Government want to split the motion there is a procedure for doing this. There would have to be a procedure before the House that the House should split the motion if each part could stand on its own feet. Each part would then be voted on. As there is considerable doubt about this, it would be wise if the House were adjourned for a short time while the matter is discussed in an easier way than we are discussing it at the moment.

Mr. English: On a point of order, Mr. Deputy Speaker. Is it not wholly within the recollection of most hon. Members that many motions which appear to be single motions on the Order Paper have been moved in separate parts? If a motion can be moved in parts, then part of it can be not moved. Anybody who puts down a motion need not move it. Is the motion amendable? If hon. Gentlemen opposite want to stop at 7 o'clock, can they put down an amendment to do so? This Question can be debated as it has been moved. [HON. MEMBERS: "Which part?"] Thereafter if the Government so feel, the House can then debate the second part of the motion and it can be negatived, if necessary.

Mr. Graham Page: On a point of order, Mr. Deputy Speaker. I am quite sure that the Government have the best intentions in deleting this part from the motion. They thought that they had put an obnoxious motion on the Order Paper which would not be acceptable, if the debate were to be guillotined at 7 o'clock.


In view of the time lost already in discussing the validity of the motion as it stands, will the Minister withdraw the motion and find another time, in accordance with customs and traditions of the House, for the Third Reading of the Bill so that we can complete the Report stage and leave the Government to get on with the further business?

Mr. Peter Bottomley: Further to that point o forder, Mr. Deputy Spaeker. You ruled earlier that this Report stage is exempted business. How is it in order for a motion to be put down that something consequent upon the completion of exempted business should be completed at a certain time? Therefore, is this motion defective?

Mr. Fairbairn: Further to that point of order Mr. Deputy Speaker. If your original ruling were accurate, what would happen in a case such as this: if there were a motion on the Order Paper that all males over 60 should suffer capital punishment if they commit murder, would it be competent for the Government to withdraw the last four words?

Mr. Rossi: On a point of order, Mr. Deputy Speaker. Your orginal ruling has attracted a lot of interest. Would it be possible for the Government, or anybody, to put down a compendium motion containing within it a number of permutations and combinations, and when the matter comes before the House, to select one or two alternatives from within the compendium motion? If that were possible the House would never know what it had to debate.

Mr. Mayhew: On a point of order, Mr. Deputy Speaker. May I ask for further help? It seems to me that the motion on the Order Paper is like putting in an order for fish and chips. We have ordered the fish and chips, but we are being offered only the fish.

Mr. Fletcher-Cooke: On a point of order, Mr. Deputy Speaker, I have a suggestion which is genuinely meant to be helpful and to enable us to get on with the business. The Government could move a manuscript amendment to delete the last words. If they did that, I am sure that you would accept it, and the motion as amended would, no doubt, be passed and we could get on with business. But if we are allowed, from

now on, to split motions and to pick and choose which bits we shall move, I can foresee disorder in this House and its Committees. If the Government amended the motion in the proper way we could get on with the Report stage.

Mr. Atkinson: On a point of order, Mr. Deputy Speaker. I understand that you have already ruled that the House can have an open-ended debate, whether it is in the form of a manuscript amendment or even a verbal utterance before the House. Whatever the basis, if you are ruling that we can have an open-ended debate on the form of the motion, I am sure there are sufficient hon. Members opposite who could keep talking around the clock on the amended version. In fairness to the House we should have a clarification of what is involved. If this suggested amendment is subject to debate, I hope that you will not rule that this will be an open-ended arrangement because that would mean that we could forget about the business on the Order Paper.

The Minister of State, Treasury (Mr. Denzil Davies): The right hon. Member for Crosby (Mr. Page) asked whether we would consider withdrawing the motion so that we should have the Report stage today and the Third Reading on another occasion.
The motion was put down for procedural reasons. The right hon. Member for Down, South (Mr. Powell) made the point that the Select Committee has been considering this matter. Because this is a Ways and Means Bill, if it is desired to take Third Reading immediately after Report stage it is necessary to put a special procedural motion on the Order Paper. The motion was put down in good faith and the time of 7 o'clock was chosen in equally good faith. There was no intention or desire to impose a guillotine. Since hon. Members have raised these objections, and since it was necessary to change the time from 7 o'clock, we believed it only fair to withdraw the motion, to continue with the Report stage today and to have Third Reading next week.
Therefore I beg to ask leave to withdraw the motion.

Hon. Members: Hear, hear.

Motion, by leave, withdrawn.

Orders of the Day — DEVELOPMENT LAND TAX BILL

As amended (in the Standing Committee), further considered.

Clause 6

SPECIAL ADDITION TO BASE A

5.12 p.m.

Mr. Graham Page: I beg to move Amendment No. 20, in page 7, line 13, at end insert:
'or the value of his reacquisition in the case of a deemed disposal'.

Mr. Deputy Speaker (Mr. Oscar Murton): With this we may take Amendment No. 23, in page 7, line 29, leave out subsections (4) to (8).

Mr. Page: The amendments relate to the special addition to base A. That sounds technical jargon, but it is well understood by those of us who struggled through the Committee stage of the Bill for many hours. The special addition to the base from which one starts to calculate the realised development value is in some cases 15 per cent. and in others 10 per cent. Where there has been a deemed disposal—not an actual disposal—and reacquisition at the commencement of the material development, certain rather complicated calculations apply. In many cases a special addition to the base figure will not be made when there has been a deemed disposal and deemed reacquisition.
The amendment is intended to simplify the calculations and to provide merely that if there is a deemed disposal and a deemed acquisition, there will be deemed figures for each—a deemed amount for which it is disposed and a deemed amount for which it is reacquired. Why not take those figures simply as base A and make the special addition to them instead of going through the long procedure set out in subsections (4) to (8), which includes a formula which looks more like an advertisement for Double Diamond than anything else?

Mr. Russell Kerr: We are only here for the beer.

Mr. Page: I know that the hon. Gentleman is only here for the beer. The Bill will provide us with a complicated formula which is BD—PD/BV. The amendments are an attempt to simplify the Bill and to save everyone a lot of trouble. They seek to make a special addition when there is a deemed disposal.

The Minister of State, Treasury (Mr. Denzil Davies): In his engaging way, the right hon. Member for Crosby (Mr. Page) suggested that the amendments would simplify the Bill. They might do that, but they would do a great deal more as well. We are all in favour of simplifying the Bill, but experience in Committee has shown us that that is not always very easy.
His point of substance was that the special addition should continue to run even after the deemed disposal and reacquisition that take place on the commencement of material development. We debated this matter at length in Committee and the Opposition suggested that the special addition should not stop at that point because that was merely a deemed disposal.
The special addition is a very important and generous relief from taxation which is provided to take into account partly the very high cost of buying land in 1972 and 1973 and partly the high interest cost which made it expensive to finance purchases. The special addition was thought to be the right way of assisting purchasers who bought at a high cost. We believe that the Government have been extremely generous in these provisions. Everything I read in professional magazines and all the commentators' views agree that that is the case. The Opposition want to us to go further and that is their prerogative. Wherever a relief is given, there is always a request to extend it.
I cannot accept the Opposition's case, for the reasons I gave in Committee. Certainly I could not at this moment find some philosophical and metaphysical reason why the special addition stops at a deemed disposal. Once there is a deemed disposal and an acquisition, there is a high base value.

Mr. Michael Spicer: The Minister seems to be basing his case upon the fact that particularly


high values were attached to properties during a particular period. He says that high costs were incurred. He says that the reason for not allowing a special addition to run beyond the specified time is that the costs by then had come down to a more reasonable level. If that is a sound argument, surely it can apply to the whole Bill, and surely in that case the whole premise of the Bill is negated.

Mr. Davies: The hon. Member has misinterpreted and misunderstood what I said. I said that in 1972–73 the costs of buying land were very high. Expansion of the money supply and various actions of the previous Government created inflated prices for land and high costs for the financing of purchases. We therefore introduced the special addition. We think that we have provided sufficient relief and that we should go no further. That is why I ask the House to reject the amendment.

Mr. Graham Page: I am sorry that the Minister cannot put forward an argument of principle for the difference between the special addition before and after deemed disposal. As far as I can see, there is no difference. I look on this as being a recompense for the money being kept idle and locked up in the property until it is developed. Even when the development starts, there is still no return from that money.
This amendment gave the Minister an opportunity to accept an increase in the special addition. I am sorry that he did not take advantage of it.

Amendment negatived.

Clause 7

MARKET VALUE, CURRENT USE VALUE AND MATERIAL DEVELOPMENT

Mr. Graham Page: I beg to move Amendment No. 24, in page 9, line 38 after 'schedule', insert—
'(b) that notice would be given under paragraph 4 of the 7th Schedule to the Community Land Act 1975 by all of the authorities in the area in which the land is situated stating that they do not intend to acquire the land'.

Mr. Deputy Speaker: With this, we are to discuss Amendment No. 25, in page 9, line 46 at end insert
; or
(iii) was the subject of planning permission granted before the appointed day, or of a

planning application made before 13th September 1974 for which permission was granted before the date on which current use value tails to be assessed; or
(iv) is development which is not materially greater in nature and extent than development for which planning permission was granted before the appointed day, or a planning application was made before the appointed day for which permission was granted before the date when current use value falls to be assessed, as the case may be'.

Mr. Page: Clause 7 sets out the definitions of market value, current use value and material development. The amendments deal with current use value. It is in the interests of the Inland Revenue that current use value should be as low as possible. It is better for the Revenue to have the maximum possible difference between current use value and the eventual price on disposal. It is in the interests of the person who has to pay the tax that current use value is as high as possible.
We should ensure that the true current use value is reflected in the final figure. The Bill omits three important points the assessment of current use value. It fails to take into account the possibility of notices under the Community Land Act being served on the owner by an authority intending to acquire the land. These notices can be served at any time and the fear of that will decrease current use value.
Amendment No. 24 provides that in ascertaining current use value we should assume that all authorities which might acquire the property have served notices under the Community Land Act saying that they do not intend to acquire it. This will prevent a false reduction in the value. Amendment No. 25 provides that in assessing current use value we should assume that the property was subject to planning permission granted before the appointed day or of a planning application made before 13th September 1974—White Paper day—for which permission was granted before the date on which current use value falls to be assessed. We should also assume that a development is not materially greater in nature and extent than development for which planning permission was granted before the appointed day, or a planning application was made before the appointed day for which permission


was granted before the date when current use value falls to be assessed, as the case may be.
In all those circumstances we should get a real current use value. The Bill recognises that we must take into account certain assumptions in assessing current use value, but it does not go far enough. The amendments are reasonable points of valuation and I hope that the Minister will accept them.

Mr. Denzil Davies: We discussed the provisions of Amendment No. 24 in Committee when I said that they were not necessary because current use value will not be depreciated by the market's reaction to the threat of acquisition under the Community Land Act 1975 because of the provisions of Section 9 of the Land Compensation Act 1961. I undertook to look at the matter again and the Inland Revenue has advised me:
We have looked into this again and there does not appear to be any doubt that Section 9 … would apply in the notional current use market envisaged in Clause 7(2) and would neutralise any depreciatory effect flowing from the presence of the local authority in the market".
That is the result of a second look at this subject. I hope that the Opposition will agree that their amendment is not necessary.
Amendment No. 25 seeks to increase current use value by including various planning permissions. The Opposition may not be happy with my reply, but if we uplift current use value to market value, we are getting away from the whole concept of current use value. I see no justification for that.
Current use value is a well-recognised concept in valuation. The Opposition are seeking to make it market value while still calling it current use value. They are attempting to relieve taxpayers of some tax. The whole concept of the legislation is that tax is paid on the difference between current use value and market value, and the amendment breaches the principle behind the legislation.

Mr. Graham Page: I accept what the Minister said about Amendment No. 24 and I am grateful to have it on the record again. We were in some doubt about this matter in Committee.
I still think that the matters referred to in Amendment No. 25 should be taken into account when current use value is being assessed. However, we shall not press this matter. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8

OPTIONS TO ACQUIRE INTERESTS IN LAND ETC.

5.30 p.m.

Mr. Ian Stewart: I beg to move Amendment No. 26, in page 11, line 27, at end insert—
'(2) The development value realised by the grant of an option shall not exceed the development value that would have been realised on a disposal at the time of the grant of the option of the interest in land in respect of which the option was granted for a consideration equal to the aggregate of—
(a) the consideration, if any, given for the grant of the option; and
(b) the price payable for the interest in pursuance of the option.'.
I move the amendment in the regrettable absence of my hon. Friend the Member for Melton (Mr. Latham), who is indisposed. My hon. Friend raised the general question of options in Committee. As the Minister of State admitted at the time, options present certain problems and complications within the context of this legislation, as in other legislation.
In Committee my hon. Friend asked whether the Minister of State would be good enough to reconsider his comments on options between Committee and Report and to outline his reflections on the matter. That is what I ask him to do at this stage.

Mr. Denzil Davies: The amendment seeks to provide that on the grant of an option the development value realised shall not exceed that which arose on disposal at the time of the grant of the option and the interest subject to it. We debated this matter at some length in Committee when I got into a few tangles on options—

Mr. Graham Page: We all did.

Mr. Davies: Yes, as the right hon. Gentleman says, we all did.
I tried to explain, as the amendment indicates, that the disposal of an option


is the disposal of an asset in itself. If it has development value—that depends on the price paid for the land subject to the option—the option is treated as having development value under the Bill. If that is the case, in principle development land tax is charged on the disposal of the option, subject to its having development value.
It was argued in Committee that we should bring the two factors together and not charge tax until there had been disposal of the land. In practice, that is what would happen. The Revenue would wait, as under the capital gains tax provisions, to ascertain whether the option was exercised. The principle of the Bill has to remain, because if the option is abandoned—this is the point that the amendment does not meet or deal with—and it is an option to buy land having development value, there is no reason for the option not being charged to tax because it is profit to the individual. The option has not been created in the sense that a base value has been provided for it.
For that reason we feel that the option should in principle be taxed, although in practice it would not be taxed unless it were an artificial option. I gave such an example in Committee—namely, an option of £500,000 to buy land for £1. However, the normal commercial option is not taxed until disposal of the land. If an option is abandoned and it has development value, tax will apply. That is the situation which the amendment does not take into account, and that is why we split the two factors in the Bill. For that reason I cannot accept the amendment.

Mr. Ian Stewart: I am grateful for the Minister's comments. He has somewhat elaborated his comments in Committee. We feel that there are still some difficulties about the interpretation of options within this measure. When an option is abandoned, the case has not really been fully made out for there being a separate interest of land on which development land tax is potentially payable. However, with the benefit of the Minister's explanation, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Ian Stewart: I beg to move Amendment No. 245, in page 12, line 38, at end insert:

'(8) This section shall not apply in relation to options granted for a lease solely relating to the carrying out of material development consisting of the winning or working of minerals.'
In effect, the amendment provides an additional paragraph to the clause, which covers the difficult topic of options. It has been represented to us that it would not be proper for an option granted in the circumstances described—namely, for a lease solely related to the winning or working of minerals—to be treated as a part disposal.
It must be emphasised that we are dealing with a situation in which the lease would relate solely to the purpose of carrying out the winning and working of minerals and that the development value would not come about at that time or as a result of the lease itself, as that would depend on the planning permission having originally been granted for working minerals and would not be related to the lease or the option applying to it.

Mr. Denzil Davies: I take it that the hon. Gentleman is concerned with a lease that is granted for mineral development within the definition of section 29 of the Finance Act 1970. He seemed to be indicating that the lease itself would not be within the charge to development land tax. If he is saying that in view of that the option for the lease should also not be within the charge—I take it that this is what the amendment is seeking—I must say that I have some sympathy with the amendment. If the lease is not within the development land charge—that is the grant of the lease—it is arguable that there is not much point in bringing the option within the charge. In those circumstances I am happy to recommend that we accept the amendment.

Amendment agreed to.

Clause 9

DEVOLUTION ON DEATH

Mr. Michael Spicer: I beg to move Amendment No. 27, in page 13, line 18, at end insert—
'(4) The acquisition of an interest in land by a person as legatee shall not be treated as a disposal by the personal representatives nor as an acquisition by the legatee, but for the purposes of this Act, anything done by the deceased or by the person representatives shall be treated as having been done (at the time


it was in fact done) by the person representatives and accordingly—
(a) the acquisition by the deceased shall be treated as if it had been the acquisition by the legatee; and
(b) any expenditure incurred by the deceased or the personal representatives shall be treated as having been incurred by the personal representatives.
(5) If not more than two years after a death any of the dispositions of the property of which the deceased was competent to dispose, whether effected by will, or under the law relating to intestacies, or otherwise, are varied by a deed of family arrangement or similar instrument, this section shall apply as if the variations made by the deed or other instrument were effected by the deceased, and no disposition made by the deed or other instrument shall constitute a disposal for the purposes of this Act.'.
We seem to be on a good streak at the moment. I am confident that, in view of the acceptance of the previous amendment by this able and honourable Minister of State—

Mr. Denzil Davies: Flattery will not get the hon. Gentleman anywhere.

Mr. Spicer: It did not get me anywhere in Committee, but I shall use it to begin with in this instance. In Committee certain assurances were given on this matter, to which I shall return.
We are trying to do an interesting thing—namely, to ensure that legatees, in a situation in which death has occurred, receive the same benefits under Clause 9 as the pesonal representatives of the deceased.
Some believe that death is not only a happy escape from all our afflictions but a conscious attempt on the part of the deceased to avoid taxation, but let us take a less extreme view and assume that it takes place without the conscious interest of the deceased. If that view is taken, we must accept that legislation should not presume that the deceased was trying to get out of paying taxes.
If that is the position, surely every ounce of justification, logic and fairness, which I hope the Minister will have much of as we progress, would demand that we treat the legatees of the deceased, as regards the various exemptions that are under consideration, in the same way as the personal representative. In the context of the Bill, that would include the £10,000 slice, the personal residence exemption and, above all, the special

addition—namely, the computation of the tax.
I move the amendment with great assurance that I shall have the same success as my hon. Friend the Member for Hitchin (Mr. Stewart) in presenting the previous amendment. I take that view for the specific reason that when we debated this issue in Committee a strong assurance was given by the Financial Secretary, when he popped in to see us on the one occasion—

Mr. Tim Sainsbury: The hon. Gentleman popped in on several occasions.

Mr. Spicer: May be he did pop in on several occasions. I think it is fair to use the words "pop in". As we have said time and time again, the Minister of State has carried this Bill almost entirely by himself. For that he carries our admiration, if not our good wishes as to the intentions of the Bill.
I am glad that it was the Financial Secretary and not the Minister who gave this particular assurance, because the Minister may well find himself personally less committed to having to defend this aspect of the Financial Secretary's contribution. However, it was the Financial Secretary who said on 27th April, in the context of a discussion on legatees and their rights,
I have undertaken to look at the particular parts of sub-section (5)"—
which referred to this issue—
which would result in a person becoming entitled to land under a deed which could be, as I said, brought about under some sort of family arrangement. In such a case, the person could take on the deceased's acquisition costs, the improvement expenditure, and so on, as if it were his own, and the dispositions of the deed are not treated as disposal for development land tax.
In this part of the amendment the hon. Member for Worcestershire, South (Mr. Spicer) and the right hon. Gentleman have made a useful point"—
that was very kind of the Financial Secretary—
which certainly needs to be looked at again."—[Official Report Standing Committee J. 27th April 1976; c. 641.]
One of the features pointed out by my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) of the conduct of this entire Bill has been the constant offering by


the Government of nice words and of assurances.
However, the path to a good DLT is not paved merely with good intentions. As I have said on several occasions, I do not think that that path actually exists. Good intentions are not good enough. They are particularly to be criticised by Opposition Members when they result in nothing. We have come across many occasions in our discussions in Committee on which assurances of some sort have been given. With due diligence we have noted these assurances in great detail. However, we found that when it came to the Bill as amended in Committee, very few of those assurances had been written into the revised Bill.
Therefore, despite our admiration for the Minister and his competence and despite our new feelings of warmth towards him as an honourable man, in view of the policy he announced in respect of the Third Reading, I must say that it gives us some cause for concern that an assurance such as this, with respect to this important issue of the rights of the legatee, has not been enshrined in the Bill as amended.
I plead with the Minister to look at this matter again. In this situation there is a very strong reason why the Minister is right to have given himself time between Report and Third Reading to consider whether to introduce some of these amendments, particularly those on which, as on this, he has given a firm assurance. I beg the Minister to accept the amendment.

5.45 p.m.

Mr. Denzil Davies: The hon. Gentleman did not deploy his case with his characteristic accuracy. He talked about an assurance being given. As he will recognise, on this corresponding amendment two matters were debated in Committee. The first was the more major matter—if I could put it that way—of whether the special addition could continue after death for the benefit of the legatee, or, indeed, beneficiaries. That was the main part of the amendment put forward in Committee.
My hon. Friend the Financial Secretary made it clear that we did not accept that case. He made it clear—as I have tried on a previous amendment, although I have a stronger case here—that once the

property passed for no consideration, be it on death or be it by gift, from the original purchaser, special addition should stop, because a death ends taxation, in some ways. It does not end in respect of capital gains tax or estate duty, but it brings taxation to an end. It also brings costs to an end, and special addition is meant as a contribution towards cost. We made it clear in Committee that we cannot allow special addition to run beyond a disposal for no consideration.
The second subsidiary point raised in Committee was the problem arising in situations in which there might be a deed of family arrangement. That is the case to which the hon. Gentleman addressed himself and that is what he was concerned about when he said that my hon. Friend gave an undertaking to look at this matter. The hon. Gentleman quoted from that part of the Committee proceedings where my hon. Friend said that we would look at the point, or words to that effect.
With regard to the problem of deeds of family arrangement, the right hon. Member for Crosby (Mr. Page) raised the same point. We have looked at the matter again and in the context of the capital gains tax legislation where provisions are made in respect of a deed of family arrangement. But, having considered it, we do not think it necessary to include in the Bill the same kind of provision as exists for capital gains tax, because DLT proceeds on a different basis.
Under Clause 9 the disposal of an interest in land to personal representatives is disregarded and the transfer to the legatees is a disposal for no consideration to which Clause 10 applies. There is in consequence no provision in the Bill which corresponds to the capital gains tax legislation, so we do not think that matters such as the capital gains tax problem or deeds of family arrangement will apply.
Perhaps I may read a short paragraph from my brief. It is important and relevant to our consideration.
It might be said that provision is needed to cover the following type of case. A testator leaves Blackacre to A and Whiteacre to B. A and B agree to exchange legacies and they would each then be treated A having disposed of and acquired for market value, and so become liable to development land tax on any


development value. This would be pretty unusual and in practice we understand things do not happen like that. The deed would probably recite that A and B are together absolutely entitled to Blackacre and Whiteacre … There would thus be no exchange and no Development Land Tax.
My note goes on to say that the right hon. Member for Crosby appeared to recognise that in the submission that he made. Perhaps that is not right, but that is the impression he gave.
It does not follow from the fact that it is necessary to have provision for a deed of family arrangement for capital gains tax purposes that it is necessary to have the same provision in this legislation, because the treatment of gifts and the taxing of assets on death are different.
This matter was looked at very carefully. Advice was taken upon it. The conclusion of our researches is that it is not necessary to deal with the point in relation to deeds of family arrangement. That is the point that my hon. Friend the Financial Secretary promised to look at, not the general point in regard to special addition once property is given away by will or deed.

Mr. Michael Spicer: Time is short and we shall obviously disagree. With that protest and note of sadness, I simply note that the Minister said that he would look at this matter very carefully. He seems to have looked at it carefully.

Amendment negatived.

Clause 10

INTERESTS IN LAND ACQUIRED BY GIFT OR, IN CERTAIN CASES, AT AN UNDER VALUE

Amendments made: No. 29, in page 15, line 29, leave out 'subsections (1) and (2) above 'and insert 'this Act'.

No. 30, in page 15, line 31, at end insert—
'(5A) Subject to subsection (6) below, if—
(a) the incidental costs of the disposal of an interest in land are borne by the person acquiring the interest or by any other person (other than the chargeable person), and
(b) no other consideration is given for the acquisition of that interest,
this Act shall apply as if no consideration were given for the acquisition of that interest'.—[Mr. Denzil Davies.]

Clause 12

EXEMPTION FOR FIRST £10,000 OF DEVELOPMENT VALUE

Mr. Graham Page: I beg to move Amendment No. 239, in page 19, line 11, leave out 'subject to subsection (10) below'.

Mr. Speaker: With this we may discuss the following amendments: No. 237 in page 19, leave out lines 14 to 28 and insert:
'any dealings by the firm shall be treated as dealings by the partners individually and not by the firm as such'.
No. 238 in Clause 31, page 53, leave out lines 22 to 29 and insert:
'the partnership shall be treated as a single individual except that any dealings by the partnership with an individual partner shall be treated as dealings by the partners individually'.

Mr. Page: Amendment No. 239 is a paving amendment to Amendments Nos. 237 and 238. Amendment No. 238 merely seeks to make a plain and obvious statement that
'the partnership shall be treated as a single individual except that any dealings by the partnership with an individual partner shall be treated as dealings by the partners individually".
One should deal with a partnership as a single individual but there will be problems if the partners deal amongst themselves with the partners individually. That is a straightforward statement which de-confuses Clauses 12 and 31 which we found confusing in Committee. It was difficult to understand how partners will be treated. If one accepts the provisions of Amendment No. 238 and a partnership is treated as an individual, then the partnership receives only one exemption of £10,000 on any dealing. But Amendment No. 237 seeks to make a partnership dealing a transaction by the individual partners for the purposes of Clause 12 which provides for the £10,000 exemption.

Mr. Denzil Davies: We discussed this difficult subject of partnerships in Committee for a considerable length of time. The right hon. Member for Crosby (Mr. Page) will not be surprised that I cannot accept his proposal. The amendment seeks to give each partner a £10,000 slice exemption from the tax in dealings,


not between the partners themselves, but with outsiders or third parties. That would mean that a partnership of 20 would get £200,000 whereas a company with the same number of individuals involved would receive only a £10,000 exemption. That would be anomalous. The Bill gives one exemption and treats partnerships as a single body for these purposes. For that reason, and for others which I expressed in Committee, I cannot recommend the House to accept the amendment.

Mr. Page: The Minister has not dealt with Clause 31, which we found confusing. Does he mean that a partnership is to be treated as a single individual, because the clause seems to mean the opposite?

Mr. Denzil Davies: A partnership is treated as a single individual for the purposes of the £10,000 slice exemption in relation to dealings outside the partnership with any other person. It is treated as a group of individuals when the partners deal with each other and each will get the £10,000 slice.

Mr. Page: I beg to ask leave to withdrew the amendment.

Amendment, by leave, withdrawn.

Clause 14

PRIVATE RESIDENCES

Mr. Sainsbury: I beg to move Amendment No. 36, in page 20, line 31, leave out paragraphs (a) and (b) and insert:
"(a) a dwelling-house or part of a dwelling-house which is or has at any time in his period of ownership been, his only or main residence, or
(b) land which he has for his own occupation and enjoyment with that residence as its garden or grounds up to an area (inclusive of the site of the dwelling-house) of one hectare or such larger area as the Commissioners concerned may in any particular case determine, on being satisfied that, regard being had to the size and character of the dwelling-house, the larger area is required for the reasonable enjoyment of it (or of the part in question) as a residence".

Mr. Speaker: With this we may discuss Government Amendment No. 37.

Mr. Sainsbury: The amendment seeks to bring the legislation into line with Clause 29 of the Finance Act 1969 which

deals with metrication. It seeks to substitute a hectare for an acre. Government Amendment No. 37 goes some way to meeting the argument which we made in Committee and I therefore leave it to the Minister to explain his amendment.

Mr. Denzil Davies: Amendment No. 36 seeks to extend the exemption for private residences from one acre of land adjoining that residence to one hectare, which is two-and-a-half acres. That goes too far and we have tried to follow the capital gains tax legislation by confining the relief to one acre. In our amendment we have extended, for some people, the relief originally in the Bill because we propose to insert the words which are used in the capital gains tax legislation, which would provide one acre
or such larger area as the Commissioners concerned may in any particular case determine".
In some cases there will be an exemption of more than one acre but that will depend on the circumstances and upon the Commissioners. I cannot accept Amendment No. 36 but I recommend Amendment No. 37 to the House.

Mr. Sainsbury: I do not see how it is possible to say that an amendment which seeks to extend an area goes too far. Perhaps another form of words should have been used. In view of what the Minister has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 37, in page 20, line 38 at end insert:
or such larger area as the Commissioners concerned may in any particular case determine on being satisfied that, regard being had to the size and character of the dwelling-house, the larger area is required for the reasonable enjoyment of it as a residence.".—[Mr. Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 38, in page 22, line 26, at end insert—
'(8A) If an individual makes a claim with respect to realised development value which accrues to him on the disposal of an interest in land which is or includes the whole or any part of the private residence of a dependent relative of the claimant, provided rent-free and without any other consideration, such relief shall be given under this section in respect of that dwelling-house as would be so given if it had been the claimant's only or main residence during the period it was his dependent relative's private residence; and where such a claim is made—


(a) any such relief shall be given in addition to any relief available under this section apart from this subsection; and
(b) for the purpose of determining any such relief, not more than one dwelling-house shall be assumed by virtue of this subsection to be the claimant's only or main residence at any one time.'.

Mr. Speaker: With this we may discuss Government Amendments Nos. 246 and 99.

Mr. Davies: The amendments fulfil an undertaking given in Committee to extend the private residence exemption to a house which is occupied by a dependent relative. The extension is being made to bring it into line with the capital gains tax legislation and the relief will be available to a dependent relative of the owner occupier. It is a small extension and relief and I recommend it to the House.

Mr. Sainsbury: The amendment represents the implementation of an undertaking made in response to my hon. Friend the Member for Melton (Mr. Latham). He raised the matter in Committee but he is unable to be here because of illness. I am sure that the Minister will want to recognise my hon. Friend's contribution.

Amendment agreed to.

Clause 15

EXEMPTION FOR CERTAIN DWELLING HOUSES BUILT FOR OWNER OCCUPATION, ETC.

Amendment made:

No. 246, in page 23, line 16, after 'or', insert
'a dependent relative of his or a person who, though not a dependant relative, is'.—[Mr. Denzil Davies.]

Clause 16

LAND HELD AS STOCK IN TRADE

Mr. Sainsbury: I beg to move Amendment No. 43, in page 24, line 14, leave out from 'trade' to end of line 18.

Mr. Speaker: With this we may discuss the following amendments:

No. 44, in page 24, line 15, leave out on that date there was' and insert 'there is'.

No. 45, in line 21, after 'be', insert 'or would have been'.
No. 46, in line 21, after 'attributable', insert 'or deemed to be attributable'.

Mr. Sainsbury: Amendment No. 44 is consequential on Amendment No. 43 and Amendment No. 46 is consequential on Amendment No. 45. Amendment No. 43 seeks to avoid having to have planning permission to qualify for the relief on stock in trade.
Amendment No. 45 deals with a problem which was recognised by the Minister in Committee, when he said:
now that he has made the point I assure the hon. Gentleman that we shall look into it. I cannot say that we shall accept the amendment, because I am not certain of the extent of the problem".—[Official Report, Standing Committee J, 5th May 1976; c. 915.]
I hope that the Minister will now say either that he is satisfied that there is a problem and that he can accept the amendment or that there is no problem and that the amendment is unnecessary.

Mr. Denzil Davies: Amendment No. 43 seeks to give stock-in-trade relief even where planning permission in respect of the land was not in force on 12th September 1974. I do not think that the hon. Gentleman would expect me to accept that amendment. We debated the matter in Committee. We are concerned here with a tax on planning permission, if that is not too loose a way in which to put it, and it would not be right to give an exemption in relation to an asset where planning permission had not been given.
The subject of Amendment No. 45 was raised in Committee by the hon. Member for Melton (Mr. Latham), who asked whether the stock-in-trade exemption would continue if there were a change in the nature of the development. I gave an assurance that I would look into the matter, and I wrote to the hon. Gentleman on 11th June telling him how we saw the position. I said:
There is nothing in Clause 16 to suggest that if a planning permission, which was in force on 12th September 1974, expires before the time of a subsequent disposal (and presumably is replaced by a fresh permission) the stock in trade exemption is lost. Similarly if the original permission is abandoned in favour of another, for example, if the site density is increased from 30 persons an acre


to 50 persons an acre, the condition that there must have been a permission at White Paper day is satisfied, although the development takes place under a different permission.
If there is a different kind of development—an increase in density, for example—the exemption is not lost, but if there is a completely different development—for instance, a change from housing to a supermarket or industrial development—it is lost. I could probably defend that by saying that it is an entirely different situation. If the development is not different in substance, the exemption is not lost.
I hope that what I said in that letter goes at least some way towards satisfying the hon. Gentleman that I fulfilled the assurance I gave the Committee.

Mr. Sainsbury: I am grateful to the Minister for that explanation. In view of what he said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17

MINERALS

Mr. Sainsbury: I beg to move Amendment No. 247, in page 26, line 30 after 'minerals' add
'or the consideration includes an amount in anticipation of the grant of planning permission authorising material development consisting of the winning or working of minerals and such planning permission is granted within three years of the date of disposal'.

Mr. Speaker: With this we may take the following amendments:

No. 248, in page 27, line 5 leave out 'one half' and insert 'one quarter'.
No. 250, in page 28, line 3 at end insert—
'(c) the construction of buildings to be used otherwise than as a dwellinghouse for the welfare of workers employed on the operations'.

Mr. Sainsbury: The amendment is an attempt to act on a memorandum of observations on the clause from the Royal Institution of Chartered Surveyors. The institution said:
We welcome the proposal to provide relief parallel to that provided under Development Gains Tax in respect of deemed disposals under Clause 17(1), and a partial measure of relief under Clause 17(3) for other disposals with planning permission for the winning or working of minerals, again similar to that under

Development Gains Tax. However, we are concerned that the latter relief does not appear to be given in respect of a disposal where there is no planning permission.
We point out that it is not unusual for mineral operators to lease land for mineral extraction before seeking planning permission. It would in our view be inequitable for such a lease to be treated differently for DLT purposes from a lease granted following planning permission. We therefore recommend that, where there is a lease to a bona fide mineral operator, the relief in Clause 17(3) should apply".
I hope that the Minister will agree that the amendment would effectively implement what the institution suggests.
I shall not press Amendment No. 248.
I hope that the Minister can accept Amendment No. 250 or say that it is unnecessary because that aspect of mineral development is already covered.

Mr. Denzil Davies: Amendment No. 247 seeks to give relief on the disposal of land where there are mineral rights, even when planning permission has not been granted. But if planning permission is granted within three years of the disposal, relief would be granted back to the point of the disposal. I cannot accept that amendment.
The objection to the amendment is that a test depending upon a subsequent grant of planning permission makes the vendor's liability to tax hang on a future event which is outside his control. Therefore, the vendor waits three years and if planning permission is granted at the end of that period he gets relief from taxation. That imposes obligations on the purchaser. No doubt indemnities and conditions would have to be imposed in contracts to see that the purchaser used his best endeavours to obtain planning permission. If he does not try hard enough, can the vendor sue him for the loss of relief he has suffered? There are all sorts of difficult ramifications to trying to give tax relief in respect of something that happens in the future when that event is outside the control of the person claiming the relief.
Amendment No. 250 is unnecessary, as the developer will be able to defer payment of DLT under Clause 19, which covers development consisting of the construction of buildings for use otherwise than as dwelling houses for the welfare of workers employed in a trade. It would


be unfair to give complete exemption to the mining industry.
I hope that I have given the hon. Gentleman sufficient assurance.

Mr. Sainsbury: I am grateful to the Minister for his assurance on Amendment No. 250 and his brave words about the mining industry—brave coming from an hon. Member representing a seat in the Minister's part of the world.
I appreciate what the hon. Gentleman said about Amendment No. 247. I see that there are difficulties, but as the matter appears to be a cause of general concern to the Royal Institution of Chartered Surveyors, perhaps he could have it discussed and dealt with in a later Finance Bill, if necessary.

Amendment negatived.

Clause 18

EXEMPTION FOR PROJECTS BEGUN WITHIN TWO YEARS OF ACQUISITION OF LAND

Mr. Denzil Davies: I beg to move Amendment No. 48, in page 28, line 13, leave out 'two' and insert 'three'.

Mr. Speaker: With this we may take the following amendments:

No. 49, in page 28, line 13, leave out 'two' and insert 'five'.

Government Amendment No. 52.

Amendment No. 53, in page 29, line 9, leave out 'two' and insert 'five'.

Mr. Davies: Amendment No. 48 extends the period within which a project or material development will be exempt from development land tax provided no signicant amount of development value would have been realised had it been begun after the land was acquired. It extends that period from two years to three.
The Opposition Amendment No. 49 would extend the period to five years. No doubt we shall hear from the right hon. Member for Crosby (Mr. Page) whether he considers that our proposal to extend it to three years is a reasonable compromise. We think that we have gone some way towards meeting the points that he raised in a long debate in Committee. We believe that three years

is long enongh for this relief, which is a complete exemption from tax in many cases.

Mr. Sainsbury: We are grateful for the Government's response to the point I raised in Committee. It was a rare occasion when we had not only words but real support from the Government side. The right hon. Member for Dartford (Mr. Irving) spoke in favour of our seeking an amendment on this point.
In view of what the Minister has said, we shall not press Amendments Nos. 52 and 53.

Amendment agreed to

Mr. Sainsbury: I beg to move Amendment No. 50, in page 28, line 24 after "above" insert
an amount shall be significant if it is more than 8 per cent. of the owner's cost of acquisition or such larger amount as appears to the Board or, on an appeal, to the Commissioners concerned to be just and reasonable, and".
This amendment is interesting, in that we are trying to introduce a definition of "significant". We had two interesting debates on this point in Committee. I remind the Minister that the Financial Secretary said:
I am asked to apply discretion to the collection of taxes. This is extremely dangerous ground indeed."—[Official Report, Standing Committee J, 6th May 1976; col. 959.]
We then went on to a debate in which the Minister replied with his usual eloquence, arguing that discretion was needed on every occasion. This is, I submit, an occasion when discretion is not needed, and a firmer definition would be more appropriate.

Mr. Denzil Davies: We had a long debate in Committee and I expressed some doubt about the word "significant". We have looked at this again in order to see whether it might be possible to insert a percentage instead of the word "significant". The problem is that 8 per cent. of a small amount is not significant, and 8 per cent. of a large amount may be significant. That is why we are unable to put in a percentage figure. If we did, there would have to be some kind of tapering or de minimis or de maximus relief, to ensure that the relief was not greater than a certain amount.
I give the Committee the assurance that this is not a matter entirely, solely and ultimately within the discretion of


the Board of Inland Revenue. There is a right of appeal, under Clause 18 (2), against any assessment. If the Revenue assess a developer on the basis that the amount is significant, he can appeal against the assessment, and the commissioners can decide whether the amount is significant or not.
It is not a case merely of the discretion of the board. The board has an initial discretion, but there is a right of appeal. I put that on the record and give the House that assurance. The commissioners will then have the difficult task of deciding whether the sum was significant, but at least it will be an independent body, a responsible body, which will decide the matter in the end.
For these reasons I cannot accept the amendment.

Mr. Graham Page: If a case goes on appeal to the commissioners, what guidance will they have as to what is meant by "significant"? We have tried to get some certainty into the administration of this clause. If the commissioners were to read what the Minister has just said in order to get some guidance as to what is meant by "significant", they would be misled.
The Minister said that 8 per cent. of a small amount would not be significant, and that 8 per cent. of a large amount may be significant, but surely "significant" is a comparative word. It is not a question whether the amount itself is significant or insignificant, but whether the amount is significant in relation to the transaction, I would not have thought that 8 per cent., however large the amount, would be significant. It would have to be an amount sufficiently large to come within the word "significant".

6.15 p.m.

Guidance should be given to the commissioners, and we suggest that the right formula here would be to have a percentage, rather than some vague idea of how much—£ 1 or £1 million—is significant. At the moment we have no guide at all. Perhaps the Minister will calm our fears by saying that there is an intention to issue some sort of guide in future which the public can read, so that the public will know whether it is worth appealing to the commissioners from a decision of the board. As it stands at

the moment, it would be complete guesswork, with no guide at all. Those of us in the various professions would not know whether to advise people to appeal.

Mr. Denzil Davies: I can at least give the right hon. Gentleman the assurance that I am sure that the Inland Revenue would look at this matter again in order to see whether it can publish or give some kind of guide, but it would not be right for the Inland Revenue to try to bind the hands of the Special Commissioners, who are an independent body. No doubt in presenting its case to the commissioners the Revenue would argue from the point of view of its guide, or from a figure it thought was significant. At the end of the day the commissioners would decide according to all the circumstances.
I shall certainly see whether it is possible for the Inland Revenue to give some kind of guide on the subject, but, as I have indicated, the commissioners may have to decide the matter in the end.

Mr. Sainsbury: It sounds as if we shall end up with an extra-statutory direction. Therefore, I am glad that my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) is not here. In view of what the Minister has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 52, in page 29, line 9, leave out 'two' and insert 'three'.—[Mr. Denzil Davies.]

Mr. Sainsbury: I beg to move Amendment No. 54, in line 27, at end insert:
'(7) For the purpose of subsection (3) above a person who has entered into a contract, whether conditional or unconditional, to acquire an interest in land shall be treated as being an owner of that interest'.
This amendment deals with the question of conditional contracts and the extent to which they create ownership. The subject gave rise to quite a long debate in Committee, in the course of which the Minister, as I think he would agree, became a little confused. He gave a very firm undertaking. He said:
I am prepared to consider it on the basis that if it is purely a technical procedural matter, we may be able to do something but if it goes into the substance of the clause I shall not be able to meet them.


I do not think that this amendment goes to the substance of the clause. I remind the Minister of the words of my right hon. Friend the Member for Crosby (Mr. Page), who is an authority on this issue. He said:
I am delighted with the Minister's speech, as he disclosed that he had completely misunderstood our amendment. But I am sure that when he does understand it, he will accept it."—[Official Report, Standing Committee J; 6th May 1976, c. 988–92]
I hope that the moment of illumination has now been reached, and that the Minister will accept the amendment.

Mr. Denzil Davies: There has been no illumination, if that is what the hon. Member for Hove (Mr. Sainsbury) wishes to see descend upon me. I am afraid that there is still a gulf between us, as we have seen in previous debates. I have looked at it again but, as far as I can see, the amendment goes beyond being a technical procedural matter.
The question is whether someone who has not an unconditional interest in land, and whose contract is subject to a condition, should be able to avail himself of what is a kind of clearance procedure, although he might never get planning permission and there might be no development at all.
Development land tax is levied on interest in land, and a conditional contract does not amount to that kind of interest in land until the condition is satisfied. If there is merely a conditional contract, the condition being that planning permission is given, the person concerned does not have the kind of interest in land for the purposes of this legislation which would allow him to ask for a kind of clearance procedure. It is only when he has planning permission and is actively contemplating development that he can properly ask for this particular kind of clearance.
Since we cannot have any meeting of the minds on this matter, I cannot accept the amendment.

Mr. Sainsbury: I am sorry that the Minister has not allowed any illumination to fall on him and that there is still a gulf between us. I suspect that this matter will cause problems and that we shall have to return to it in a later Finance Bill.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19

DEVELOPMENT FOR TRADE PURPOSES

Amendment made: No. 55 in page 29, line 28, leave out Clause 19.—[Mr. Denzil Davies.]

Clause 20

GROUPS OF COMPANIES

Amendments made: No. 63, in page 33, line 14, leave out '19' and insert (Development for industrial use)'.

No. 64, in page 33, line 24, leave out 'a trade' and insert 'any trade at all'

No. 65, in page 33, line 32, leave out from beginning to 'any' in line 33 and insert:
chargeable person shall be construed as a reference to'.—[Mr. Denzil Davies.]

Clause 21

COMPANY CEASING TO BE A MEMBER OF A GROUP

Amendments made: No. 66, in page 34, line 23, leave out '19(1)' and insert (Development for industrial use)(1)'.

No. 67, in page 34, line 36, leave out '19(1)' and insert '(Development for industrial use)(1)'.

No. 68, in page 35, line 5, leave out '19(1)' and insert '(Development for industrial use)(1)'.—[Mr. Denzil Davies.]

Mr. Ian Stewart: I beg to move Amendment No. 69, in page 35, line 8, leave out 'as near as may be'.
This amendment may appear to be facetious, but it is not intended to be so. It raised a question in the mind of the Minister whether the drafting of the immensely complicated Clause 21(5) was satisfactory. Clause 21 deals with a case in which a company ceases to be a member of a group. Subsection (5) deals with the case in which land has been developed for industrial purposes and the interest held at the time when the land was developed does not exactly match the interest held by the company leaving the group.
The difficulty is that we felt that the words
as near as may be
were exceptionally vague following the precision of the preceding lines in the subsection. Why not use the phrase "by and large", or "as near as damn it" or "by no more than a cat's whisker", or something like that?
Does the provision refer only to the nature of the interest? We are worried that it might also relate to the extent or value of the difference. If that is so, it would create doubts as to how the clause should be interpreted. With that explanation, I invite the Minister's comments, with the benefit of the time he has had for reflection.

Mr. Denzil Davies: In the time between the Committee stage and now the parliamentary draftsman has wrestled with this monster, but it must be said that the monster has got the upper hand of him.
The hon. Member for Hitchin (Mr. Stewart) is quite right to say that I misled the Committee, if that is the right way to describe it. I suggested that the words were concerned only with area, but they are meant to relate both to interests in land and the particular area mentioned in subsection (5).
Let me give an example. If one member of a group has developed 10 acres of land for industrial purposes and has subsequently transferred three acres to another member, that is a part disposal. The 10 acres may comprise a freehold and the three acres a leasehold. Therefore, there would be a part disposal of that area and a part disposal of an interest in land.
The draftsman had to examine both the area and the interest. He attempted to find a more precise form of words. I assure the House that parliamentary draftsmen always strive for precision. In this case he has been unable to produce a better form of words to describe this situation. I am sorry to have to say that the words
as near as may be
will have to stay in the Bill. We have considered this matter at some length, and I wish that we could have accepted the amendment, but in the result we cannot do so.

Mr. Ian Stewart: I am grateful to the Minister for the attention that he has given to this problem and also for the further and slightly corrected comments he has made. It is useful to have this exchange on the record. In view of what the Minister has said, and bearing in mind the appalling difficulties that the parliamentary draftsman must have faced in dealing with this subsection at all, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23

STATUTORY UNDERTAKERS

Mr. Denzil Davies: I beg to move Amendment No. 70 in page 37, line 42, at end insert
'nor
(iii) a disposal which forms part of a sale and lease-back transaction'.

Mr. Speaker: With this amendment, we may also take Government Amendment No. 71.

Mr. Davies: These are relieving amendments. They add sale and leaseback transactions to categories of disposal in Clause 23 that will not operate as a trigger by a statutory undertaking.
In Committee we introduced amendments to provide that a sale and leaseback would not trigger in relation to industrial developments. These amendments seek to extend the provisions to statutory undertakers. In some cases they may also wish to use this fairly normal form of financing. The amendments seek to extend the relief.

Mr. Ian Stewart: We are grateful for the Minister's explanation. We believe that these amendments constitute welcome improvements to the Bill.

Amendment agreed to.

Amendment made: No. 71, in page 39, line 19, at end insert—
'(7A) Subsections (7) and (9) of section (Development for industrial use) above shall apply for the purposes of this section as they apply for tile purposes of that section, except that, in the application of those subsections for the purposes of this section,—
(a) any reference to the relevant interest shall be construed in accordance with subsection (1) of this section; and


(b) the reference to subsection (1) of that section shall be construed as a reference to subsection (1) of this section.
(7B) If after the primary disposal, within the meaning of subsection (7) of section (Development for industrial use) above, as that subsection has effect by virtue of subsection (7A) above, there is a disposal of the lease referred to in subsection (7)(c) of that section, so much of the relevant interest as subsists in the building or other land which is the subject matter of the lease shall be treated for the purposes of subsection (1) above and section 27 below as having been disposed of on the date of the disposal of the lease.'.—[Mr.Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 72, in page 39, line 32, leave out 'any' insert:
'the British Airports Authority, means the Secretary of State for Trade; and
(aa) in relation to any other'.
Clause 23 gives deferment of DLT liability to statutory undertakers when they develop their land for the use of the statutory undertaking. Any question whether the use is for the purposes of the undertaking is to be determined by the "appropriate Minister". Subsection (8)(a) gives the expression "the appropriate Minister" the same meaning as in Part XI of the Town and Country Planning Act 1971.
One of the results of this is that for both pieces of legislation the appropriate Minister for the British Airports Authority would be the Secretary of State for the Environment instead of, as was intended for DLT, the Secretary of State for Trade. This amendment is to rectify the position for DLT.

Mr. Graham Page: I am a little touchy about this amendment. It seems to imply that there was some error in the Town and Country Planning Act 1971. We all know that that Act was absolutely perfect. Of course, there could not have been one error in that measure. It was felt that the Secretary of State for the Environment should be the designated authority in this case but it raises an extraordinary position. For every other purpose it will involve the Secretary of State for the Environment, but for the purposes of DLT it will be the Secretary of State for Trade. I feel that there will be a dispute between the Departments of Trade and Environment as to who shall do what with regard to the British

Airports Authority. Would it not have been better to say that we will correct the position and make the Secretary of State for Trade the designated Minister in the case of everything to do with the BAA?

Amendment agreed to.

Clause 25

CHARITIES: DEVELOPMENT ON LAND ACQUIRED AFTER 12TH SEPTEMBER 1974

6.30 p.m.

Mr. Denzil Davies: I beg to move Amendment No. 77, in page 42, line 29, leave out from 'is' to end of line 30 and insert:
'neither—

(i) a deemed disposal, nor
(ii) if the relevant interest is a lease, a disposal which forms part of a transaction by which one lease is surrendered and a new lease is granted of the whole or substantially the whole, of the land in which the relevant interest subsisted

Mr. Speaker: With this amendment it may be convenient to take Government Amendment No. 79.

Mr. Davies: These amendments deal with charities. Under the Bill as originally drawn the sale and leaseback concession was not given to charities, nor would it be appropriate for them. But the possibility of the surrender of a lease triggering a charge to tax was raised in Committee. The amendment covers surrender and the grant of a new lease, so that the new lease itself will become the relevant interest for the future and subject to the rules regarding deferred liability; so the trigger does not operate in respect of surrender of the lease. This question was discussed in Committee and these two amendments are in response to remarks made by the right hon. Gentleman.

Mr. Graham Page: As the Government insist on taxing charities and on this imposition of DLT, any small relief is welcome. This clause is a small relief, and a very right and proper one as the clause is at present drawn, though we could wish that charities were not taxed at all under the Bill.

Amendment agreed to.

Amendment made: No. 79, in page 43, line 22, at end insert:
'(4A) Immediately after a disposal of the relevant interest which forms part of a transaction falling within paragraph (ii) of subsection (1) above, that subsection, this subsection and section 27 below shall have effect as if the new lease were itself the relevant interest'.—[Mr. Denzil Davies.]

Clause 26

DEFERRED LIABILITY FOR DEVELOPMENT LAND TAX

Mr. Graham Page: I beg to move Amendment No. 231, in page 44, line 15, leave out 'an approved co-operative' and insert 'a'.

Mr. Speaker: With this amendment it may be convenient to consider the following amendments:

No. 232, in page 44, line 16, at end insert:
'(c) the Housing Corporation'.

No. 233, in page 44, line 19, leave out subsection (2).

No. 234, in page 44, line 34, leave out 'or subsection (2)'.

No. 235, in page 45, line 18, leave out 'registered'.

No. 236, in page 45, leave out lines 27 to 30.

Mr. Page: I am much obliged for your suggestion that we may take the other amendments with this one, Mr. Speaker.
We are dealing now with Clause 26 of the Bill, which gives certain exemptions to some housing associations and reliefs to others. It picks out, rather astonishingly I think, approved co-operative housing associations and self-build societies as those to receive complete exemption from the tax. We recollect from previous debates that charities are not exempt from the tax but yet we have approved co-operative housing associations and self-build societies picked out for this special benefit under the Act.
Then, in subsection (2), two similar kinds of body are not given full exemption but are merely given deferment of the tax. They are the Housing Corporation or a registered housing association which is neither an approved co-operative housing association nor a self-build

society. So the ordinary common or garden association merely gets relief, whereas a co-operative housing association gets complete exemption. I do not know why there should be this distinction between the co-operative housing association and the cost-rent housing association. For that reason, these amendments would move the cost-rent association into the exempt category merely by removing the preceding words "housing association", so that exemption would refer to all housing associations. The subsection would then continue to refer to the self-build society but the amendments would add the Housing Corporation to the exempted bodies.
If an approved co-operative housing association is accepted under the Bill as being exempt from the tax, surely that should extend not only to all housing associations but also to the Housing Corporation itself. I do not believe the Housing Corporation very frequently undertakes actual building, or buying or selling. It is not essentially for that purpose. If it does so it is doing it on the same principle as the other two kinds of housing association. In these amendments, therefore, we wish to give exemption to all kinds of housing associations, to the self-build society and to the Housing Corporation.

Mr. Nicholas Fairbairn: May I intervene briefly before the Minister makes his debates of his no doubt intended rejection of the amendment? As I understand the purport of his remarks, he has told us that it would not be right for recreation grounds, for example, to be exempt, because other things might not be exempt. He has said it would not be right for charities to be exempt because only some people would benefit, and it would not be right for pension funds to be exempt, because not everybody is a member of a pension fund. What of this clause, which proposes to give special treatment only to some people?

Mr. Denzil Davies: Perhaps I may first explain to the right hon. Member for Crosby (Mr. Page) why we have drawn this distinction, since my explanation may go some way to answering the question from the hon. and learned Gentleman. The right hon. Gentleman says quite correctly that the clause as


drafted gives exemption to approved cooperative housing associations and self-build societies. That is because they are very similar to owner-occupiers. Indeed, as we understand them, self-build societies and co-operative housing associations build houses for owner-occupation for members of those bodies. They are, therefore, almost on all fours with owner-occupiers and we feel it is right to give them exemption, as owner-occupiers already get exemption on disposing of their property.
The hon. and learned Gentleman asks why these bodies should be given any exemption at all, since we are not giving exemption to recreation grounds or charities. We give exemption to owner-occupiers, and I should have thought that most people would consider it was right to exempt owner-occupiers from the provisions of the Bill. I would expect hon. Gentlemen opposite to object strongly if, under this legislation, we were to suggest taxing the owner-occupier on his one house. There have always to be exemptions, and I made last night the point that care has to be taken with exemptions to avoid being unfair.
The Housing Corporation differs from self-build societies, as I believe the right hon. Gentleman would agree. I understand that the latter build houses for letting and not for occupation by members. To that extent, therefore, they are different. I believe that in most cases they build for letting. For that reason, it was felt right to defer the charge on commencement of material development and charge them only the true DLT on the actual disposal of the property.

Mr. Graham Page: In many cases housing associations which let properties may, when they are fully let, eventually sell the whole construction.

Mr. Davies: The right hon. Gentleman goes some way to confirming what I have said, that they build for letting and then sell off. We thought it right to defer the charge at the point of commencement of material development until the charge arises on the actual sale. That is why the two are treated differently. The self-build society is more akin to owner occupation. The Housing Corporation is different, and the Bill as drawn reflects

the differences between them. I ask the House not to accept the amendments.

Mr. Graham Page: I find that argument most unconvincing. There is no distinction in the service provided by these bodies, so that one should be exempt altogether and the other should only have the tax deferred for a certain period.
Both the Minister and I have used the phrase "exempt body" throughout this debate. I am not sure whether we are right in doing so. As I understand it, although these two bodies—the co-operative housing association and the self-build society—are exempt bodies under the clause, I am not sure whether they would have the right to make a purchase net of tax. They seem to be in another clause of the Bill. But if they are not why are they not? I ask my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) why, for example, his Scottish Special Housing Association should be an exempt body under Clause 11 whereas the Housing Corporation and the co-operative housing associations are given a little special exemption under another clause and apparently do not then come into the category of those who can purchase net of tax. I cannot say that I am sorry about that, because I do not like the procedure of purchases net of tax. But I do not see why my hon. and learned Friend's SSHA should have that benefit when other housing associations do not.
The difficulty with this legislation is to find some logic so that it is possible to work out why the Government are allowing some not very deserving bodies off the tax and refusing to do the same for very deserving bodies such as the charities.

Amendment negatived.

Clause 27

DEFERRED LIABILITY FOR DEVELOPMENT LAND TAX

Mr. Graham Page: I beg to move Amendment No. 249, in page 47, line 10, at end insert,
'except that where the value of the interest which is the subject matter of the operative disposal is less than 25 per cent. of the value of the interest which was the subject matter


of the deemed disposal and there are no other part disposals of the interest which was the subject matter of the deemed disposal in the same year, there shall be no liability arising under subsection (2) above'.
Clause 27 deals with the deferral of liability for development tax in the case where liability for the tax on a realised development has accrued to any person on the deemed disposal of an interest in land and is deferred till the occasion of a subsequent disposal of the interest which was the subject-matter of the deemed disposal. That means that, for this period, the payment of the tax is deferred, but that, when certain events happen, it triggers off the payment of the tax. One of those occasions is set out in subsection (4) which says that, if the operative disposal is only a part disposal of the interest, that appears to trigger off the payment of tax on the whole.
The purpose of the amendment is to prevent the triggering off of the payment of the tax—the cutting off of the deferral of the tax—if the part disposal is not of a substantial amount. The amendment proposes a figure of 25 per cent.
I hope that the Minister will be able to accept this amendment and that, having granted the deferral of the tax in the circumstances set out earlier in Clause 27, he will say that it is not to be triggered off and that the person is not to become liable to the payment of tax by merely disposing of a small part of his interest in the land—a small part of his interest or a small part of the land. For this purpose I have considered a small part to be 25 per cent. If that amount is disposed of, the tax should not immediately become payable, and the person should still have the benefit of deferring payment.

6.45 p.m.

Mr. Denzil Davies: The right hon. Gentleman seeks some kind of de minimis provision in relation to the triggering off provisions in the legislation. He said that 25 per cent. was not a significant amount. I thought that we had returned to our debates on "significant amount". It could be a significant amount It depends what is the total sum of which the amendment proposes 25 per cent.
One reason why I cannot accept the amendment is that, in some cases, it could cover the deferment of tax on certain deemed disposals into an outright exemption.

All that would be needed would be the disposal of the developed land piecemeal over a period of four years—25 per cent. this year, 25 per cent. next year, and so on—which, over a four-year period, would avoid the liability completely. That is the main reason why I cannot accept the amendment.

Mr. Graham Page: If I may correct the Minister, the amendment says 25 per cent. of the first interest with which we are dealing—the interest in which we are concerned about the deferral of the tax. Once 25 per cent. of that has gone, subsection (4) will operate. It is not intended to be a process of 25 per cent. at a time.

Mr. Fairbairn: I pay tribute to the many qualities of the Minister and to the wise course that he has adopted today. However, I must correct his mathematics. It is not possible to get rid of 25 per cent. this year, 25 per cent. next year, 25 per cent. the year after, 25 per cent. the year after that, and dispose of the whole. Once the first quarter is disposed of, it leaves three-quarters. That means that in the first year 25 per cent. of the whole is disposed of, in the second year 25 per cent. of the remaining three-quarters is disposed of, and so on. The hon. Gentleman's argument does not seem to be valid in this case.

Mr. Denzil Davies: I was concerned about 25 per cent. of the original asset. I appreciate that the right hon. Gentleman did not intend the effect which I suggested could happen, but, as we know, in fiscal legislation intentions and results are not always the same.

Amendment negatived.

Clause 34

INTERACTION OF DEVELOPMENT LAND TAX WITH OTHER TAXES

Mr. Ian Stewart: I beg to move Amendment No. 81, in page 55, line 26, leave out "section 80 or section 82" and insert
sections 80, 81 or 82".
I do not wish to repeat the case I made in Committee except to say that in subsection (1) of Clause 34 the provisions of the interaction schedule are stated to apply to certain other taxes for the interaction with development land tax,


and Sections 80 and 82 of the Income and Corporation Taxes Act 1970 are included but not Section 81. We wanted to know the reason why. The Minister explained that this was basically an anti-avoidance provision and that any conceivable transaction which might come under it could hardly be a bona fide one. He undertook to consider it in case genuine cases could be caught.
I move this amendment to give the Minister an opportunity to comment further.

Mr. Denzil Davies: We have looked at this again to see whether there is any concrete evidence that innocent transactions can be caught. That was the suggestion made by various bodies, but no concrete evidence has been supplied, and we have not been able to find any innocent situation which would be caught.
Section 81 is a tax avoidance section. It goes further and is more complicated than Sections 80 and 82.
For those reasons, I am afraid that I cannot accept the amendment.

Mr. Ian Stewart: We are grateful to the Minister for having looked at it. In the light of what he said and the negative result of his consideration, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Denzil Davies: I beg to move Amendment No. 84, in page 56, line 9, at end insert
or a capital distribution as defined in section 51(1) of the Finance Act 1975, made on the occasion of a transaction on which an interest in land is acquired by any person".

Mr. Deputy Speaker (Mr. Oscar Murton): With this we may take the following amendments:

No. 85, in page 56, line 9, at end insert
and any capital distribution within the meaning of Schedule 5 to the Finance Act 1975 including a capital distribution treated as made by virtue of any provision of that Schedule".

Government Amendments Nos. 87 and 88.

Mr. Davies: The amendments are in fulfilment of an undertaking given in Committee that we would provide interaction relief in respect of capital transfer tax on capital distribution out of a settlement.

The amendments fulfil that undertaking and they also cover the point raised by the Opposition in Amendment No. 85, in substance, is covered by Government Amendment No. 84.

Mr. Ian Stewart: I welcome the Government's action in responding to the point that we put forward in Committee. We tabled Amendment No. 85 only to prompt the memory of the Government. I know the Government had difficulty in putting down the amendments on time. We welcome the Government's kindness in responding to the point which we raised.

Amendment agreed to.

Mr. Denzil Davies: I beg to move Amendment No. 86, in page 56, line 9, at end insert:
'(3A) If, by virtue of any provision of this Act, liability for development land tax on any realised development value which accrues on a deemed disposal is deferred until a subsequent disposal or other event, then, without prejudice to the operation of section 12(8) of this Act, for the purposes of Schedule 6 to this Act and, in particular, for the purpose of determining whether any chargeable realised development value accrues on that deemed disposal and, if so, the amount of that chargeable realised development value, the liability shall be assumed not to have been deferred.'.
This amendment seeks to resolve a possible difficulty in connection with interaction relief where DLT liability on the commencement of a project is deferred and there is a subsequent disposal. In fact the intention has always been to grant a relief and this amendment puts it beyond doubt by clearing up some drafting difficulties.

Amendment agreed to.

Amendments made:

No. 87, in page 56, line 19, leave out 'Subsection (2)' and insert 'Subsections (2) and (2A)'.

No. 88, in page 56, line 20, after 'value', insert 'and the value transferred by chargeable transfers'.—[Mr. Denzil Davies.]

Mr. Ian Stewart: I beg to move Amendment No. 89, in page 56, line 42 at end insert:
'(7) Where any adjustment is made in the computation of the profits arising or losses incurred in an accounting period or year of assessment in giving effect to a deduction or other adjustment under this Act, a claim for relief or (as the case may be) for additional


relief under any other provision of the Tax Acts which is made in consequence of that deduction or adjustment shall not be out of time if it is made before the end of the period of two years beginning with the date on which the deduction or adjustment is agreed or otherwise determined, notwithstanding that the time limit otherwise applicable to a claim under that provision has expired'.
We also discussed this matter in Committee. We felt the Bill should contain a provision which would permit tax adjustments as a result of a DLT assessment to be made within a period of two years from the time when the DLT assessment was agreed or otherwise determined. The reason is that there could be occasions when such an adjustment would be out of time, but the potential payer of DLT might not reasonably have been able to take advantage of the interaction and offset because he was not fully aware of his liability. That would be likely to take place in the case of a deemed disposal.
It could perhaps be his own deemed disposal of which he was unaware and one would not have too much sympathy in such a case. However, in view of the many areas of considerable doubt in the legislation there are a number of cases where it would not be at all easy to establish whether or not a potential DLT liability was likely to be incurred. A more serious possibility would be where another party triggered off a DLT liability by some action which was not known, or not fully understood, by the taxpayer. One possible example is the case of old leases, many of which are very permissive in their terms. It could be that if a trader was to own the freehold of a property, which had a lease to a tenant, who then changed the use of the property and the owner had sold the freehold and settled his accounts on the basis of no knowledge of the deemed disposal, he might have gone to appeal on his accounts and tax assessment in other areas, but he may subsequently have been caught for a DLT assessment which he might not then be able to take into account if the matter was settled.
It might even be a tied cottage, and if the tenant retained it after the end of his agricultural tenancy it might revert to non-agricultural use. In a case like that it could well be that the freeholder of the property would not actually know

that he was to be liable for DLT. We felt, in order to provide for cases of that kind, that it would be proper for the legislation to include a means of redress for DLT offset if, otherwise, the taxpayer would have been out of time for making his claim.

Mr. Denzil Davies: I confess that I have some sympathy with this amendment, but that does not mean that I shall accept it. This is a new and different tax, and the argument I put forward in Committee was that there could be difficulties in giving a different period for claiming relief for one tax compared with another. There may be problems in this legislation in giving an extra two years in this particular case. However, this problem is not likely to arise in the next few months because it is a case of claiming relief and there is some time available. If there are difficulties, and that time is insufficient because of the complexity of the tax, I can give the assurance that we shall seriously consider introducing amending legislation to put the matter right. At the moment we do not think there will be a problem, but if there is, I can give the House that assurance.

Mr. Fairbairn: It is terribly clumsy for the Minister to say that he appreciates that we have a valid point and then to say that there will be amending legislation to this major tax after it has taken so many amendments to get it even half right the first time round. Surely there is a better answer than that.

Mr. Stewart: I realise, in spite of what my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) has said, that there are considerable difficulties in amending the legislation at this stage. The Government have realised that there may be a problem and I am grateful to the Minister for what he has said. I was hoping that, under the circumstances, he would at least say that the matter could be subject to review and perhaps be put right by other legislation if, on further consideration, that was found necessary. In the light of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 38

TERMINATION OF FIRST LETTING CHARGE

7.0 p.m.

Mr. Ian Stewart: I beg to move Amendment No. 90, in page 62, leave out lines 5 and 6.

Mr. Deputy Speaker: It would be convenient to discuss at the same time Government Amendment No. 91.

Mr. Stewart: Since the Government have tabled Amendment No. 91, I would ask the Minister to comment on that.

Mr. Denzil Davies: The hon. Member will appreciate that I could not accept Amendment No. 90 but No. 91 goes some way to meeting the point, and fulfilling an undertaking given in Committee that we would change the date in relation to the transitional provisions for the first letting charge to a date on or after 18th May 1976. Amendment No. 91 fulfils that undertaking.

Mr. Stewart: I am grateful for that explanation. The draftsman has managed to achieve our objective by reducing the length of the Bill, when our amendments would have increased it. I therefore welcome what the Minister has said and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 91, in page 62, line 6, leave out 'the appointed day' and insert '18th May 1976'.—[Mr. Denzil Davies.]

Clause 39

DEDUCTION OF DEVELOPMENT LAND TAX FROM CONSIDERATION IN CASE OF CERTAIN DISPOSALS TO EXEMPT BODIES

Mr. Denzil Davies: I beg to move Amendment No. 95, in page 64, line 21, leave out from 'and' to end of line and insert:

(a) no regulations containing provisions with respect to the matter specified in paragraph (b) of that subsection shall be made unless a draft of the regulations has been laid before and approved by a resolution of the Commons House of Parliament; and
(b) a statutory instrument containing any other regulations under this subsection'.

Mr. Deputy Speaker: With this it will be convenient to take Government Amendment No. 181.

Mr. Davies: This amendment, again, fulfils an undertaking that we gave in Committee, that if there is to be any change in the percentage formula deduction it shall be done by an affirmative resolution of the House instead of the negative resolution as in the original legislation.

Amendment agreed to.

Clause 40

DEDUCTION ON ACCOUNT OF DEVELOPMENT LAND TAX FROM CONSIDERATION FOR DISPOSALS BY NON-RESIDENTS

Mr. Fairbairn: I beg to move Amendment No. 240, in page 65, line 5, at end insert:
'(a) from any payment if immediately before the payment is made the person to whom the disposal is made does not know or could not reasonably have known that the usual place of abode of the person entitled to the payment is outside the United Kingdom, or'.
The amendment relates to Clause 40 and Schedule 2. It is purely to protect persons resident abroad, either temporarily or permanently. It seems a reasonable amendment and I hope that it will find favour with the Minister.

Mr. Denzil Davies: The hon. and learned Gentleman correctly says that this is a reasonable amendment. The only problem relates to three words in the middle—"does not know". The words "could not reasonably have known" are perfectly sensible and appropriate, but the other three words could create difficulties. A person may not know but he may not even have taken reasonable steps to find out.
If those words were left out the amendment would add nothing to our intentions. The intention is to publish regulations, which will set out the position comparably with other regulations and deal with this problem in relation to Clause 40. The words in the amendment would do no harm in the legislation subject to the fact that we could not accept the words "does not know" because then there would be no onus upon the purchaser to find out the place


of abode. I am sorry to have to deploy that argument, but for that reason I cannot accept the amendment.

Mr. Graham Page: On a point of order, Mr. Deputy Speaker. Since the Minister has said that the amendment is acceptable save for three words, would you accept a manuscript amendment to this amendment to correct its language? It cannot be corrected anywhere else in Parliament. When the Bill leaves us today it will not go to the other place for amendment. Since the Minister is prepared to accept the amendment without these words, it would be reasonable to make a manuscript amendment to remove them.

Mr. Deputy Speaker: I am not empowered to do that. Only Mr. Speaker can accept manuscript amendments.

Mr. Graham Page: Further to the point of order. You tempt me to ask you, Mr. Deputy Speaker, to send for Mr. Speaker so that we might get the Bill right. There are enough things wrong with it already, but at least we are ad idem with the Minister on one point. It is of course possible to make amendments on Third Reading, although it is unusual in this House.
Perhaps I could leave the point of order now and speak to the amendment itself. This is a most important matter. I speak now in a capacity that I have disclosed many times—as a practising solicitor. If this provision is not made in this clause chaos will be caused in conveyancing. Almost every time, the purchaser and his solicitor will have to ask whether a vendor's usual place of abode is overseas. Even the vendor's adviser may not know whether his client has a place of abode overseas.
If these inquiries do not produce anything, there still seems to be that absolute liability on the purchaser to deduct 50 per cent. from the purchase money. It is an extraordinary provision—not to deduct the tax but to deduct 50 per cent. of the consideration of the purchase of the property. If this question whether the vendor has at place of abode overseas has to be investigated in every conveyancing transaction, conveyancing will be drastically delayed.
I have said that amendments may be made on Third Reading and I see no

reason why, if the Minister accepts that our amendment is correct without these words, that should not be satisfactorily done. I am dealing not with matters of principle but with a practical matter which will cause terrible confusion in the ordinary conveyancing of property. I only hope that we can make the amendment here and now. I urge the Minister to try to do something about this.

Mr. Denzil Davies: I fairly made the point that if the words "does not know" were left out the amendment would be improved, but I want to refute what the right hon. Member for Crosby (Mr. Page) said, that without the amendment there would be chaos. I made it clear in Committee that we intended to publish statutory regulations setting out various guidelines. We have consulted the Law Society about doing it this way and I understand that it is content with the proposal that we have made. We may not have consulted the Law Society of Scotland but we have consulted the Law Society. The regulations will achieve exactly what the amendment seeks.
Perhaps I should not have said that without those three words the amendment would be acceptable. I was being honest and saying that without them the amendment might as well be in the Bill, but I want to make it clear that the regulations will meet the point in a way which is acceptable to the Law Society, which will have to operate this. I therefore hope that the right hon. Gentleman and his hon. and learned Friend will accept that as the position. No problem will be created. The regulations will put the matter right. The Law Society is satisfied that the matter should be dealt with by regulations. I am sorry that, for that reason, I cannot accept the amendment.

Mr. Fairbairn: I listened to the Minister on both occasions. I think that I may be able to help him and my right hon Friend the Member for Crosby (Mr. Page) out of their difficulty that only Mr. Speaker may accept a manuscript amendment.
The Minister is worried that if we say "does not know" or "could not reasonably have known" we shall mean two classes of people—those who have deliberate ignorance, and those who have excusable ignorance. The desired effect


is equally well achieved by substituting the word "and" and the word "or".
This is a matter of interpretation in England. It was laid down by the House of Lords that in any statute the word "and" means the word "or". Therefore, in law the sentence may equally well read "could not know". That is perfectly acceptable. It does not create a category of deliberate ignorance it is a category of people who do not know and could not reasonably have known. The words "and" and "or" are interchangeable in statute law. That is established in many cases—for instance, in the Road Traffic Act, where to say "drove recklessly at a speed and in a manner dangerous to the public" is the same as saying "drove recklessly at a speed or in a manner dangerous to the public". That is a well established fact.
The Minister will therefore be able to draw from his continuing well of sympathy, the contents of which he is so anxious to give us. He will be able to accept an amendment in which he believes but which he cannot accept for technical reasons.
It is remarkable that it is always the Minister's technical feelings that prevent him from indulging his faith. I ask him to accept the amendment on the basis of that correct interpretation.

Mr. Denzil Davies: The hon. and learned Gentleman attempted to save his amendment. I would not wish to argue about such an interpretation, but my advice is to the contrary. I cannot possibly accept the amendment when the advice I have received is not in accord with his point.
We shall cover this point by means of statutory regulation. It is acceptable to the Law Society. This is a case of neither good intentions nor sympathy. We shall meet the point under the subordinate legislation. We cannot meet it in the primary legislation.

Amendment negatived.

Clause 45

TIME OF DISPOSAL AND ACQUISITION OF INTERESTS IN LAND

Amendment made: No. 98, in page 69, line 9, leave out 'section 3(2)' and insert:

'subsections (2) and (2A) of section 3'.—[Mr. Denzil Davies.]

Clause 47

INTERPRETATION

Amendments made:No. 99, in page 72, line 36, at end insert:
'"dependent relative", in relation to an individual, means—

(a) a relative of the individual, or of his or her wife or husband, who is incapacitated by old age or infirmity from maintaining himself, or
(b) the mother of the individual or of his or her wife or husband, if the mother is widowed or living apart from her husband or, in consequence of dissolution or annulment of marriage, a single woman'.

No. 100, in page 73, line 40, at end insert:
(bb) in relation to Northern Ireland, his personal representatives as defined by section 45(1) of the Administration of Estates Act (Northern Ireland) 1955; and'.

No. 101, in page 75, line 6, at beginning insert:
'Unless the contrary intention appears'.—[Mr. Denzil Davies.]

Orders of the Day — Schedule 1

PROJECTS OF MATERIAL DEVELOPMENT

7.15 p.m.

Mr. Denzil Davies: I beg to move Amendment No. 102, in page 76, line 29, at beginning insert 'an operative'.

Mr. Deputy Speaker: With this we may take Government Amendments Nos. 102 and 104.
We may take Amendment No. 106, in page 77, line 29, at end insert:
'Provided always that the Board shall if so requested in a notice given under paragraph 36(1) of Schedule 8 certify the development and the land comprised in a project of material development by virtue of this paragraph'.
We may also take Government Amendments Nos. 107, 108, 114 to 120, 194 and 195.

Mr. Denzil Davies: I hope that the House will discuss this amendment and all the amendments that are grouped with it, together with the consequential amendments and the amendments to Schedule 8, that is Amendments Nos. 194 and 195.

Mr. Graham Page: We find that these amendments are acceptable. However we are not certain whether they cover the amendments standing in the names of my right hon. and hon. and learned Friends—that is, Amendments Nos. 106 and 121.
If it is the wish of the House, perhaps the Minister will confirm that those amendments are included or are covered fairly well by his own amendments. That will save the time of the House.

Mr. Denzil Davies: I think that I may give the right hon. Gentleman the assurance that we substantially cover the points that were raised in Committee. The argument centred on more than one notice being received by the Inland Revenue on the commencement of development or project development.
The right hon. Gentleman raised the point that the Revenue should take the first notice. The amendments to Schedule 8 meet his point at least three-quarters of the way, as they provide for the concept of an operational notice if there is a conflict and we receive a number of notices. Where there is no conflict between notices, we do not meet his point. Where there is a conflict between the notices we meet the point which the right hon. Gentleman raised in Committee. There is an appeals procedure. We have gone substantially the whole way to meet his points. If there is a conflict between the notices we shall not take the first notice. The matter may be resolved first by the Inland Revenue and then on appeal. I hope that that is sufficient to show him that we have gone a long way to meet his points.

Amendment agreed to.

Mr. Denzil Davies: I beg to move Amendment No. 103, in page 76, line 32, leave out from 'then' to end of line 40 and insert:
'for the purposes of this Act the project shall be taken to be begun on the specified starting date unless—
(a) the Board are informed by or on behalf of the person by whom the notice was given that the project was not in fact started, or will not be started, on the specified starting date, or
(b) the Board notify that person that they consider that the specified starting date is materially different from the date on which the project would be taken to be begun having regard to sub-paragraphs (1) and (2) above, or

(c) notice is given by the Board under paragraph 6(5) below with respect to the, whole or any part of the material development specified in the notice of the project,
and accordingly in any case falling within paragraphs (a) to (c) above, the date on which for the purposes of this Act the project is to be taken to be begun shall be determined without regard to the date specified in the notice under paragraph 36(1) of Schedule 8 below.'

Mr. Deputy Speaker: With this we may take Amendment (a), in line 15, at end add
'subject to any decision by the Special Commissioners upon an appeal to them to review a decision by the Board under this sub-paragraph.'

Mr. Graham Page: I should like to intervene at this point, if I may. Amendment No. 103 is satisfactory to the Opposition provided that it covers Amendment (a). I think that the Minister may be able to confirm that it provides the appeal for which we ask in Amendment (a).

Mr. Denzil Davies: I give that assurance, although the amendment is slightly different. The right hon. Gentleman asked for a special appeals procedure. The appeal is there. There will be an appeal to a special commissioner.

Amendment agreed to.

Amendment made:

No. 104, in page 76, line 40, at end insert—
'(4) Notwithstanding anything in sub-paragraph (1) above, where, in relation to a project of material development, the Board determine the date on which the project should be taken to be begun and serve notice of their determination under paragraph 36(3B) of Schedule 8 below, the project shall be taken for the purposes of this Act to be begun on that date'—[Mr. Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 105, in page 77, line 15, leave out from "and" to end of line 16 and insert
that project shall be taken to be begun at the end of the period specified in the planning permission referred to in paragraph (a) above".
The effect of the amendment is to defer the liability to development land tax when a limited planning permission is extended. Paragraph 3 of Schedule 1 provides that where a project has been carried out under a limited permission and the permission is extended, a new project is deemed to have been commenced. As the Bill stands, this new project is taken


to have commenced on the date the permission was extended or when a fresh planning permission for a further period was given. The amendment will defer the date of the start of the assumed new project until the expiry date of the current limited permission.
This is a relieving amendment. It defers payment of the tax until the expiry date, a point made by the right hon. Member for Crosby (Mr. Page) on Second Reading and probably in Committee too.

Amendment agreed to.

Amendments made: No. 107; page 77, leave out lines 32 to 42 and insert—
(a) notice relating to a project of material development has been given under paragraph 36 of Schedule 8 below and
(b) that notice was either—
(i) an operative notice under sub-paragraph (1) of that paragraph, or
(ii) a notice given by the Board under sub-paragraph (3B) of that paragraph, and (c) in a case falling within paragraph (b)
(i) above, no notice has been given under paragraph 6 (5) below with respect to the whole or any part of the material development specified in the notice referred to in paragraph (a) above,
then, for the purposes of this Act, no development which does not fall within the nature and scope of the project as specified in the notice referred to in paragraph (a) above shall be taken to be development comprised in the project; and no land which does not form part of the land specified in that notice shall be taken to be land comprised in the project".

No. 108, in page 77, line 45, leave out from "where" to "and" in line 46 and insert
in relation to a project of material development, an operative notice has been given under sub-paragraph (1) of paragraph 36 of schedule 8 below, or a notice has been given by the Board under sub-paragraph (3B) of that paragraph".—[Mr. Denzil Davies.]

Mr. Graham Page: I beg to move Amendment No. 109 in page 78, line 28, at end insert
(7) In the case of development comprising a material change of use of a building and alteration or improvement works to be carried out for the purpose of that change of use the change of use together with the alteration and improvement works shall be taken to comprise a single project of material development.
This amendment is self-explanatory. It seeks to make certain that, where there is development which comprises a

material change of use of a building, with alteration or improvement works to be carried out for the purpose of that change of use, the change of use with the alteration and improvement works are taken as a single project of material development. It seems that this is one transaction it should not be treated as a number of separate transactions which could give rise to the elaborate procedure of valuation for the purposes of development land tax that must occur on a material development and therefore a deemed disposal.

Mr. Denzil Davies: This amendment might produce a certain inflexibility as regards the treatment of projects. I accept what the right hon. Gentleman has said, however, that there may be some cases where the amendment would be of assistance. In view of that, I am prepared to recommend that it should be accepted.

Amendment agreed to.

Mr. Ian Stewart: I beg to move Amendment No. 110, in page 78, line 32, after 'development', insert 'other than landscaping'.

Mr. Deputy Speaker: With this we may take Amendment No. 113, in line 42 at end insert 'or (c) was landscaping'.

Mr. Stewart: I hope that the virtues of this amendment are self-evident.

Mr. Denzil Davies: The hon. Member has moved the amendment briefly. Most Opposition amendments have certain virtues. We have tried to meet the point of this amendment in the circular which the Department of the Environment sent out to local authorities, specifically mentioning landscaping as one of the blocking reservations which might be placed on a planning permission. I do not believe it is necessary to incorporate this amendment in the Bill.

Mr. Michael Spicer: I am not quite sure whether that reply is good enough from my point of view. Why must we have these circulars? Why not put it in the Bill? There is too much government by circular, certainly with this legislation. If the Minister accepts the principle why cannot he accept the amendment?

Amendment negatived.

Mr. Graham Page: I beg to move Amendment No. 111, in page 78, line 41, leave out sub-paragraph (b) and insert—
'(b) was not so authorised but had either been approved in the manner applicable to that planning permission or was approved after the appointed day pursuant to application for approval of reserved matters submitted before the appointed day'.

Mr. Deputy Speaker: With this we may take Amendment No. 112 in line 42 at end insert
'or might reasonably (on the appointed day) have been expected to have been approved in that manner not being development for which, on the date of disposal, approval has been refused in that manner'.

Mr. Page: This is a matter of considerable substance. We are trying to amend a paragraph which says that, in determining for the purposes of an earlier paragraph what material development of any land was authorised by planning permission in force on the appointed day—and that is an important matter to decide—only such development of the land as on that day
was not so authorised but had been approved in the manner applicable to that planning permission
shall be taken to have been authorised.
Amendment No. 111 would remove those words and insert the rather broader definition.
Amendment No. 112 stands as an alternative or an addition. As the clause stands it is a hit and miss affair whether a person has the planning permission at the right moment. It can never be judged when a planning permission is to be granted. It may be a short period or it may drag on for a long time, being considered by the planning authority, and may eventually be granted exactly as the application required, or very near to it. If a planning permission is so granted in accordance with these amendments it seemed that the definition of material development should be adjusted.

Mr. Denzil Davies: Our debate in Committee highlighted some of the difficulties of trying to frame suitable legislation to cover this point. We are here concerned with reservations on matters in planning permissions before the appointed day. These could be major or minor reservations. It would be impossible—and the amendment does not seek to do this—to draw any distinction between

major and minor reservations which might be allowed later.
The only fair way is the way in which the Bill operates, namely that, subject to the exception about appeal to the Minister and another exception, if there is planning permission on the appointed day one consequence follows and if there is not another consequence follows. Once we start having to decide which reservations are all right and which are not we get into considerable difficulty.
I mentioned earlier the circular from the Department of the Environment and the hon. Member for Hitchin (Mr. Stewart) said that this was government by circular. Perhaps I did not explain the purpose of that circular. It has been well publicised, especially in professional journals. The circular told local authorities to get a move on and to unblock reservations before the appointed day—before the tax came into operation. The circular was meant to help the taxpayer, to help developers, and to push local authorities into granting planning permission so that developers would not be faced with a tax on many reservations. This is not government by circular. It does not impose any legal obligation. It seeks to assist developers in the operation of planning matters.

7.30 p.m.

This is as far as we can go, because it is important to frame the legislation to cover all the different reservations—some large, some small, some genuine and some not so genuine. For these reasons, I cannot accept these two amendments.

Amendment negatived.

Amendments made: No. 114, in page 79, line 8, after 'receives', insert 'an operative'.

No. 115, in line 23, at end insert:
'(2A) In any case where—
(a) in relation to the additional development the Board give notice under paragraph 36(7B) of Schedule 8 below, and
(b) it appears to the Board that the whole or any part of the additional development constitutes a separate project of material development, having regard to all relevant matters, including in particular the nature and scope of the original project, and
(c) by the notice referred to in paragraph (a) above, the Board so direct with respect


to the whole or such part as may be specified in the notice of the development to which that notice relates,
the provisions of this Act, other than this paragraph, shall have effect as if the development to which the direction relates were comprised in a separate project of material development'.—[Mr. Denzil Davies.]

Mr. Deputy Speaker: With the agreement of the House, perhaps I can ask the Minister to move formally Government Amendments Nos. 116 to 120 inclusive.

Amendments made: No. 116, in page 79, line 26, leave out 'notice' and insert 'direction'.

No. 117, in line 27, after '(2)', insert 'or (2A)'.

No. 118, in line 40, after 'begun insert an operative'.

No. 119, in page 80, leave out lines 9 and 10 and insert—
'(5A) In any case where—
(a) after the date on which the original project is begun, notice relating to another project of material development (in this paragraph referred to as "the subsequent notice") is given by the Board under paragraph 36(3B) of Schedule 8 below, and
(b) the date which is specified in the subsequent notice as the date on which the project referred to in the notice is to be taken to be begun falls within the period of three years beginning with the date on which the original project began, and
(c) it appears to the Board that the whole or any part of the material development to which the subsequent notice relates constitutes a part of the original project, having regard to all relevant matters, including in particular the nature and scope of that project,
the Board may, by the subsequent notice referred to in paragraph (a) above, direct that the whole or such part as may be specified in the notice of the material development to which that notice relates forms part of the original project.
(6) Where a direction is given by the Board under sub-paragraph (5) or sub-paragraph (5A) above, the material development to which the direction relates'.

No. 120, in line 14, at end insert—
'(7) On an appeal against an assessment to development land tax, the Special Commissioners shall have jurisdiction to review any decision taken by the Board under subparagraph (2)(b), sub-paragraph (2A(b), subparagraph (5)(c) or sub-paragraph (5A)(c) above'.—[Mr. Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 122, in page 81, line 27, at end insert—
'9A.—(1) The provisions of this paragraph apply where, by virtue of the beginning of a project of material development,—
(a) there is a deemed disposal of a major interest which is an interest falling within paragraph 8(2) above (in this paragraph referred to as "the incumbrance"); and
(b) there is a deemed disposal of another major interest on which the chargeable person is treated, by virtue of paragraph 9(1) above, as having assumed a contingent liability in respect of the incumbrance.
(2) Where realised development value accrues to the holder of the incumbrance on the deemed disposal referred to in sub-paragraph (1)(a) above, liability for development land tax on that realised development value shall be deferred until the occasion of the first subsequent disposal of the incumbrance which is not a deemed disposal.
(3) In its application to a liability for development land tax which is deferred by virtue of this paragraph, section 27 of this Act shall have effect with the omission of subsections (4) to (6) and, in subsection (3), of the words "Subject to subsection (4) below"'.
This amendment, again, fulfils an undertaking given in Committee. This is a very difficult and complex area, but the point was drawn to my attention that there might be double taxation here. As I promised in Committee, I have considered this again and the amendment removes any possibility of double taxation in relation to incumbrances.

Amendment agreed to.

Amendment made: No. 123, in page 82, line 5 leave out '50' and insert 'thirty-five'.—[Mr. Denzil Davies.]

Orders of the Day — Schedule 2

REALISED DEVELOPMENT VALUE SUPPLEMENTARY PROVISIONS

Mr. Denzil Davies: I beg to move Amendment No. 125 in page 86, line 45 leave out 'base B or'.

Mr. Deputy Speaker: With this we may take Government Amendments Nos. 126 and 127.

Mr. Davies: These amendments are consequential upon relieving amendments moved in Committee. However, the consequences of these amendments were not all met in Committee, therefore this is a tidying up operation.

Amendment agreed to.

Amendments made: No. 126, in page 87, line 1 leave out 'base B and'.

No. 127, in page 87, leave out lines 8 to 13.—[Mr. Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 128, in page 90, line 12, after interest', insert
'but if section 6 of this Act did not apply on the disposal of the relevant interest it shall not apply on a subsequent disposal of the retained interest'
This is not an amendment in consequence of any undertaking in Committee. It is to put right the fact that in the legislation, as drafted, it might have been possible under Schedule 2 for the taxpayer to get relief in relation to the whole asset on each part disposal. This amendment seeks to prevent relief on a disposal going on and on, with a taxpayer getting the same relief over and over again on each part disposal.

Amendment agreed to.

Mr. Graham Page: I beg to move Amendment No. 129, in page 97, line 28, at end insert
'but so that in no case shall the consideration be brought into account prior to the actual date of its receipt'.
In the paragraph to which this is an amendment it says that for the purposes of this Act the consideration for a disposal shall be brought into account, and it sets out two occasions when that is done. But it does not say that in no case shall consideration be brought into account prior to the actual date of its receipt. This is a very important matter from the point of view of liability, and the payment of tax. I urge the Minister, having looked at the matter again, to accept this amendment.

Mr. Denzil Davies: The right hon. Member for Crosby (Mr. Page) will not be surprised to hear me say that I cannot accept it. We had a long debate in Committee on the whole subject of tax on receipts and tax when the right to consideration arises. There was a great deal of dispute on this matter because hon. Members opposite refused to accept that it is a fairly general rule that tax is charged on the right to receive instead of on the actual receipt. A subsidiary issue is the question of instalments and that takes us back to the capital gains tax legislation. This is a very big issue and the amendment is quite fundamental. I

could not possibly accept it. The arguments against it are the same as those I deployed in Committee.

Mr. Graham Page: I agree that this is really fundamental, and I appreciate that this is only one item in the whole Bill in which we are including this fundamental principle. It would need a lot of amendments elsewhere and possibly even another Bill altogether if our principle were accepted. We put this amendment down merely to register our protest at the charging of tax on money which has not yet been received. Although the Minister says that this is done in other cases of taxation, there is no need to do it in this case. This is taxation on an increasing value which does not involve the receipt of any money.

Mr. Michael Spicer: Does this mean that our Front Bench is indicating that we fundamentally disapprove of this Bill, and may well consider its total repeal when we come to office?

Mr. Page: I do not think I should say that on this particular point. I will deal with it in the Third Reading debate when we get to it.

Amendment negatived.

Mr. Denzil Davies: I beg to move Amendment No. 130, in page 97, line 33, at end insert—
'(3) Where the relief obtainable under sub-paragraph (2) above requires a discharge or repayment of tax, it shall be given on a claim to the Board and such a claim may be made at any time'.

Mr. Deputy Speaker: With this we may take Government Amendment No. 131.

Mr. Davies: Once again these two amendments are in consequence of debates in Committee. The fear was expressed that there might not be a right of appeal. These two amendments put the matter beyond any doubt and assure the right of appeal to the commissioners, or the Board of Inland Revenue.

Amendment agreed to.

Amendment made: No. 131, in page 97, line 44, at end insert—
'(3) Where the relief obtainable under subparagraph (2) above requires a discharge or repayment of tax, it shall be given on a claim to the Board and such a claim may be made at any time'.—[Mr. Denzil Davies.]

Mr. Graham Page: I beg to move Amendment No. 132, in page 99, line 42, leave out paragraph 30 and insert—
'30. There shall be no part-disposal under subsection (2) of section 3 of this Act if the sum which is derived as mentioned in that subsection was received under a policy of insurance against the risk of any kind of damage to or loss of land or buildings'.

Mr. Deputy Speaker: With this we may take the following amendments:
No. 133, in page 99, line 42, leave out paragraph 30 and insert—
'30. There shall be no part-disposal under subsection (2) of section 3 of this Act if the sum which is derived as mentioned in that subsection satisfies both the following conditions:—
(a) that it was received under a policy of insurance against the risk of any kind of damage to, or the loss of, an asset, and
(b) that it is expended on repairing, restoring, reinstating or replacing the asset within three years of receipt or within such longer period as the Board may by notice in writing allow.'
Government Amendments No. 134 to 136.
No. 137, in Schedule 2, page 99, line 46, at end insert 'or
(ii) obtained under any enactment or the common law as compensation in respect of damage to or the loss of, land or building as a result of a riot of an unlawful assembly'.

Mr. Page: In these amendments we go back to a matter that we debated on other parts of the Bill, including our debates only yesterday, if I recollect correctly. They relate to the question whether the receipt of insurance money for the loss of property is a disposal of the property and whether it thus gives rise to development land tax. It seems that under Schedule 2, paragraph 30 it would be so treated. We want to be certain that it is not so treated, and that is the intention of Amendments Nos. 132 and 133.
Amendment No. 137 deals with the situation in which it is not insurance money that is received as a result of the destruction of the property, but compensation in respect of damage to or loss of land or buildings as a result of riot or unlawful assembly. The amendment seeks to provide that the same provisions shall apply so that the compensation shall not be treated as a disposal of the property giving rise to some assessment of

realised development value and development land tax.
I cannot believe that when one's property is destroyed by riot and one is entitled to some payment out of the Police Fund if the Riot Act has been read, or if the money is received from an insurance company by virtue of a policy when the premises are burnt down, it can be treated as a disposal upon which one is taxed. I hope that the Minister will make it clear now that that is not so.

Mr. Denzil Davies: Amendments Nos. 132 and 133 seek an assurance that the receipt of insurance moneys as compensation would not give rise to taxation. Under the Bill the receipt of insurance moneys amounts to a part disposal. The actual moneys received are not taxed because the Bill provides that the sum received shall be equal to the value for DLT purposes, and that ensures that no DLT can arise on the receipt of the money itself.
There is, however, a trigger of part disposal, and since the insurance payment would rank as a part disposal, in theory deferred tax might become payable. However, the Bill provides that where the triggered disposal is a part disposal the amount of tax to be paid shall be determined by the Board of Inland Revenue or, on appeal, by the Special Commissioners in a just and reasonable manner. Where an owner wishes to reinstate or restore his property it is unlikely that the commissioners or the board would take the view that any deferred tax should be paid. In theory, the tax might have to be paid, but in practice the Special Commissioners would, on appeal, determine the matter on a just and reasonable basis.
Amendments Nos. 134 and 135 have been put down in response to the right hon. Gentleman's suggestion in Committee that the word "capital" might be too restrictive. The amendments omit the word "capital", and to that extent they are relieving amendments.
Amendment No. 136 seeks to apply to Northern Ireland the point that the right hon. Gentleman was making in Amendment No. 137. It excludes sums received under the Criminal Injuries Act (Northern Ireland) or any other enactment from the provisions of the Bill. I see no objection to Amendment No. 137


which seeks to extend the provisions of Government Amendment No. 136 from Northern Ireland to other parts of the United Kingdom. I hope that the right hon. Gentleman does not anticipate any great difficulties in other parts of the United Kingdom. The principle is the same in both amendments and I could not possibly refuse to accept what the right hon. Gentleman is proposing. I cannot accept Amendments Nos. 132 and 133.

Amendment negatived.

Amendments made: No. 134, in page 99, line 45, leave out "capital".

No. 135, in page 99, line 45, after "sum", insert "(i)".

No. 136, in page 99, line 46, at end insert:
or
(ii) obtained under the Criminal Injuries to Property (Compensation) Act (Northern Ireland) 1971, or under any enactment repealed by that Act, as compensation in respect of damage to, or the loss of, a building".[—Denzil Davies.]

No. 137, in page 99, line 46, at end insert:
or
(ii) obtained under any enactment or the common law as compensation in respect of damage to or the loss of, land or building as a result of a riot or an unlawful assembly".—[Mr. Graham Page.]

Orders of the Day — Schedule 3

IMPROVEMENTS

7.45 p.m.

Mr. Denzil Davies: I beg to move Amendment No. 138, in page 100, line 41, leave out from "behalf" to end of line 42.

Mr. Deputy Speaker: With this we may take the following amendments: Government Amendments Nos. 142 and 143.
No. 139, in page 100, line 41, leave out from "behalf" to end of line 42 and insert:
properly associated with the acquisition of the relevant interest, whether incurred before, at the time of or after the said acquisition—".
No. 140, in page 100, line 41, after "behalf", insert "in connection with
or".
No. 141, in page 100, line 43, leave out:
in enhancing the value of that interest being
and insert:
intended to be".

Mr. Davies: To some extent the amendments meet the point raised by the right hon. Gentleman in Committee. I said then that I had some sympathy with his case, but I think that the relaxation he was seeking would go too far. We have looked at the matter and discovered that my reservations were not entirely well-founded. Accordingly, the amendments meet some of the points that the right hon. Gentleman made in Committee.

Mr. Sainsbury: Perhaps I may take this opportunity to congratulate the Minister on his endurance. Some of us are not here all the time, but he seems always to be here, and nearly always to be speaking.
We are grateful for the Government amendments, since in Committee the Minister said that it was difficult to bring in legislation to take account of the situation then described. I am glad that he has been able to overcome the difficulty. The Government amendments are a great deal better than nothing. Accordingly, we would not wish to press our amendments.

Amendment agreed to.

Amendments made: No. 142, in page 100, line 43, leave out "that" and insert "the relevant".

No. 143, in page 101, line 12, at end insert:
(4) Notwithstanding anything in subparagraph (1) above, if—
(a) there is a deemed disposal and reacquisition of an interest in land, and
(b) the time of acquisition—
(i) of the relevant interest, or
(ii) of an interest which, on the disposal of the relevant interest, is a part of the relevant interest for the purposes of Part I of Schedule 2 to this Act,
is the time of that reacquisition,
expenditure which, on the deemed disposal referred to in paragraph (a) above or on an earlier deemed disposal of an interest in land, was reflected in the relevant base value of the interest disposed of is not expenditure on improvements in relation to the disposal of the relevant interest."—[Mr. Denzil Davies.]

Mr. Sainsbury: I beg to move Amendment No. 145, in page 101, line 24, after 'condition', insert:
'or there is associated with that permission any agreement with the planning authorities, or any other authority, statutory undertaker, charity or any other person or party, such condition or agreement being one'.

Mr. Deputy Speaker: With this we may take the following amendments:

Government Amendment No. 149.
No. 146, in page 102, line 19, after 'condition', insert' or agreement'.
No. 147, in page 102, line 23, after 'condition', insert 'or agreement'.
No. 148, in page 102, line 25, after 'condition', insert 'or agreement'.

Mr. Sainsbury: Government Amendment No. 149 is in response to points raised by my right hon. Friend the Member for Crosby (Mr. Page) on one of those occasions on which he is a great master—a "clause stand part" debate. I am glad the Government have responded and I hope the Minister can assure us that his amendment deals with the point raised by my right hon. Friend.

Mr. Denzil Davies: I gave an undertaking in Committee to look at this matter. The result of my review is Amendment No. 149, which meets the substance of Amendments Nos. 145 to 148, although they seem to go a little further than the Opposition went in Committee. I realise that this may be a drafting problem.

Mr. Sainsbury: I am grateful for that assurance. There is always a tendency for Oppositions to go a little further than necessary when they are attempting to draft amendments.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 149, in page 102, line 31, at end insert:
'5A.—(1) Where, after the time of acquisition of the relevant interest or of an interest which is a part of the relevant interest for the purposes of Part I of Schedule 2 to this Act,—
(a) planning permission was granted for the development of any of the land in which that interest subsists or subsisted, and
(b) as part of an arrangement relating to the grant of that permission, the charge-

able person enters into an agreement falling within sub-paragraph (2) below which contains a condition restricting or otherwise regulating the development or use of other land in which, at the time of the making of the agreement, the chargeable person held an interest,
paragraphs 3 to 5 above shall apply as if the condition referred to in paragraph (b) above were a condition subject to which the planning permission referred to in paragraph (a) above was granted and, accordingly, as if the interest referred to in paragraph (b) above were the affected interest, as defined in paragraph 3 above.
(2) An agreement is one to which subparagraph (1) above applies if—
(a) a public body is a party to it, and
(b) it does not result in the receipt of any such sum as is referred to in section 3(2) of this Act and does not otherwise form part of the consideration for the disposal of an interest in land, and
(c) it is enforceable, by or under any enactment, by the public body referred to in paragraph (a) above against persons deriving title under the chargeable person in respect of the land to which the agreement relates.
(3) In this paragraph "public body" means
(a) a body specified in any of paragraphs (a) to (d) of subsection (1) of section 11 of this Act; or
(b) a Minister of the Crown or government department, including a department of the Government of Northern Ireland; or
(c) a statutory undertaker, within the meaning of section 23 of this Act'.—[Mr Denzil Davies.]

Orders of the Day — Schedule 4

CURRENT USE VALUE AND MATERIAL DEVELOPMENT

Mr. Graham Page: I beg to move Amendment No. 150, in page 105, line 25 leave out 'ten' and insert 'forty'.

Mr. Deputy Speaker: With this we may discuss Amendment No. 151, in page 105, line 36 leave out 'three' and insert 'six'.

Mr. Page: Amendment No. 150 relates to the paragraph setting out the activities which constitute development, but not material development for the purposes of the Act. Part of the list refers to
the carrying out of works for the rebuilding, as' often as occasion may require, of any building which was in existence at the relevant time, or of any building which was in existence in the period of ten years immediately preceding


the day on which that time falls but was destroyed or demolished before the relevant time, so long as (in either case) the cubic content of the original building is not exceeded by more than one-tenth".
This is a familiar situation in planning. If one is exceeding the size of the original building by only one-tenth, it is not treated as development. But the period of destruction of buildings provided for is only 10 years. The rebuilding plus one-tenth provisions were introduced shortly after the war to deal with the problem of buildings destroyed in the war. In many big cities, such buildings have not yet been rebuilt.
If we restrict the period to 10 years, we are saying that if a building were destroyed only 11 years ago, the rebuilding, even if it keeps within the one-tenth provision, may be treated as material development. We ought to give relief for buildings destroyed as long as 40 years ago.
A later part of the schedule deals with car parks and refers to
the carrying out of operations for, or the use of land for, car parking, provided that such use shall not exceed three years".
I am not sure why the period of three years was chosen. A longer time would be appropriate.
The Bill provides that it shall not constitute material development if the period for which land is used for car parking does not exceed three years. That is a very short period. Six years would be much more reasonable.
Our amendments are not an attack on the principle of the Bill. They are sensible and reasonable and will make these matters more practical for those involved in development.

Mr. Michael Spicer: My right hon. Friend the Member for Crosby (Mr. Page) has raised the question of temporary planning permission in connection wth car parking and is trying to extend the exemptions.
This subject was aired in Committee. The whole subject of temporary permission is bady treated in the Bill. It relates not just to car parks but also, for instance, to caravan sites, and a number of operators will be badly hit when short-term planning permission lapses and it has to be recomputed for the assessment of the tax.
In some cases, quite substantial amounts of tax will have to be paid and this is unfair.

Mr. Denzil Davies: Amendment No. 150 seeks an extension from 10 years to 40 years. Any Minister soon learns that whenever a period of years is mentioned in legislation, he is asked to justify it and the justification is usually that there has to be a period and that the one in the Bill is the best the Government can devise. I shall use a similar argument tonight, although I can at least say that 10 years was chosen for the development gains charge. The fact that it applies to one tax does not mean that it is good for another, but it indicates that this is not an arbitrary figure that we have just plucked out of the air. Ten years was thought to be a good figure for the development gains charge and there have been no representations or complaints about it. The charge is levied on gains in a different way but at the same rates of tax.
I am advised by those well versed in planning that a lengthening of the time limit would have another implication. The present rule is an incentive to developers to proceed with redevelopment to clear sites reasonably quickly and helps to discourage arbitrary demolition.

Mr. Graham Page: Of course that is so, if the people concerned can get planning permission, but many are unable to develop because they cannot get the permission.

Mr. Davies: That may be so, but no doubt there are also many cases where they can get planning permission. I do not know the reasons for these decisions.
The 10-year period is an encouragement to redevelopment which would be reduced if we accepted the Opposition's suggested 40-year period.
Amendment No. 151 relates to car parking. We had a moderately long debate in Committee on the subject Car parking, like partnerships and options, seems to have exercised the Committee for a considerable time. I do not have strong views about car parking, and I do not think that the three-year provision we have included in the Bill makes very much difference, but as the right hon. Member for Crosby (Mr. Page) has


spoken so cogently on the amendment, as he always does, I am prepared to accept it.
I remind the hon. Member for Worcestershire, South (Mr. Spicer) that I wrote to him about temporary permission.

Amendment negatived.

Amendment made: No. 151, in page 105, line 36, leave out 'three' and insert `six'.—[Mr. Graham Page.]

Amendment made: No. 153, in page 106, line 50, at end insert—
'and
(d) lifts and staircases'.—[Mr. Denzil Davies.]

8.0 p.m.

Mr. Ian Stewart: I beg to move Amendment No. 241, in page 106, line 50, at end insert 'and
(d) canopies'.
Although we did not discuss the merits of Government Amendment No. 153 relating to lifts and staircases, it appeared to us during our deliberations in Committee that there might be some other categories that should be included in the schedule that do not constitute a material development. I shall explain as briefly as possible why we feel that canopies should be included as an additional item.
The question which arises is the effect of development land tax as regards the conversion of existing garage premises to self-service filling stations. There is a significant change within the motor trade to self-service filling stations to cut operating costs and to give a better service to the public. However, when an existing garage goes self-service, the cubic content of the buildings comprised in the self-service development is almost always less than the cubic content of the buildings demolished. It follows that in the majority of cases such conversions are unlikely to be subject to development land tax. Most of them will fall at the very least within the 10 per cent. tolerance that is permitted under Schedule 4.
The question arises whether a canopy counts as a building for development land tax purpose. A canopy is standard to the self-service development schemes of many oil companies. They would normally be situated immediately over the petrol self-service area. The canopy would not be

part of or joined to the control building where the customer pays for the petrol, except for perhaps a link between the two for electric cables or other services. The control building is usually to the side or rear of the self-service area. The canopy would probably be supported by a single perpendicular girder, or perhaps more than one, which would be sited on the pump island.
The canopy is normally one-dimentional other than the girder. Its sole purpose is to keep rain off customers during the self-service operation and to provide adequate lighting underneath. Would such a canopy count as a building? The point is unclear in Clause 47(1). The expression "building" is defined specifically as including
any structure or erection, and any part of a building, as so defined, but does not include plant or machinery comprised in a building.
I understand that in a recent tax case it was held that a canopy should not be regarded as plant or machinery. Therefore, the Revenue might well feel obliged to argue that the definition of a building in Clause 47(1) includes any structure or erection and includes a canopy. On the authority of that tax case, that might be the interpretation within the definition of a building for development land tax.
We felt it necessary to table the amendment to clarify the matter. If it is not settled, we hope to persuade the Government that canopies, along with lifts and staircases, should be included.
If a canopy is to be taken into account in the calculation of cubic content following the redevelopment of a petrol station to operate as a self-service station, it could be outside the 10 per cent. tolerance that means development land tax assessment. That hardly seems to be the intention of Parliament.
At present many garage owners are finding it difficult, for a number of reasons, to continue in business profitably. Many factors operate against their profit margins. We feel that one route towards greater efficiency on the forecourts is the move towards self-service arrangements where the increase in volume justifies the cost. It would be in the interests of garage owners that canopies should clearly be excluded from material development for the purpose of development land tax. I hope


that the amendment will find favour with the Government.

Mr. Denzil Davies: The hon. Member for Hitchin (Mr. Stewart) has moved an interesting amendment. Perhaps at this stage I should read some of my brief. I sometimes enjoy doing so, much to the amusement of the Inland Revenue. My brief states:
It is not known what is intended to be covered by the word 'canopy'. The Concise Oxford English Dictionary gives a range of definitions including, roof-like projection over niche, etc.'. Planning legislation recognises 'porches' but not 'canopies'. The definition of this term would therefore present difficulties".
The problem, as the hon. Gentleman recognises, is that "canopy" is a word which does not have a very exact meaning in planning legislation. Bearing in mind what the hon. Gentleman said about the tax case, the word does not seem to have an exact meaning in relation to fiscal legislation. I do not think that the hon. Gentleman expects me to accept the amendment.
The hon. Gentleman referred to the rebuilding of petrol filling stations, and my brief touches upon that matter. In some cases there might be some difficulty, but the amendment goes much wider and covers canopies in general. I cannot accept the amendment. One reason that I am unable to do so is because of the imprecise nature of the word and the meaning that would be given to it. That is why I cannot introduce it into legislation.

Mr. Ian Stewart: I am not entirely surprised by the reaction of the Minister of State. However, I hope he will accept that the amendment has raised a potentially important point. Even if it cannot be resolved by his accepting the amendment, I hope that the Government will give further consideration to the matter. I hope that they will do something if, on reflection, it appears that the Bill could catch canopies, as erected by petrol stations, for development land tax. If that is not the Government's intention, I hope that they will do something about it.
It would be helpful to have a statement from the Government that it is not their basic intention to include canopies in this context. I hope that at least they will be able to reconsider the matter.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 154 in page 107, line 1, leave out 1st July 1948' and insert '12th September 1974'.—[Mr. Denzil Davies.]

Mrs. Lynda Chalker: I beg to move Amendment No. 156, in page 107, line 41, at end insert—
'(c) docks or other transport purposes.'.
It may be somewhat surprising to those awaiting social security legislation to see me on my feet on such a Bill as this. However, I am concerned, because throughout the Committee stage of the Bill it seems that the Committee did not look at the situation in respect to docks. As a member of the parliamentary panel of the British Ports Association, I am concerned about the situation that docks face.
Many docks are in a period of great change, particularly in Liverpool. Old facilities are being contracted and new deep-water facilities are being required in their place. The ports are most concerned about the way in which the existing use value of an obsolescent or obsolete dock would be assessed in accordance with the terms of the Bill as now drawn.
The effect of the amendment when read in conjunction with paragraph 5(1)(f) is to enable the current use value of an obsolete or obsolescent dock to be assessed on the basis that it could be used for "other transport purposes".
We all know that recent developments have regrettably resulted in considerable areas of "operational land" becoming surplus to dock requirements, with all the other problems that that involves. That is particularly true of the South Dock area in Liverpool. But these areas of dock land have been "operational land", as I understand it, as defined for Town and Country Planning Act purposes, and have been the subject of deemed planning permissions under class xviii B of the Town and Country Planning General Development Order 1973.
If these white lands, as they are now known—areas for dock use—remain on that basis, we suspect that problems could arise under the proposed legislation


relating to the dock land that becomes surplus to operational requirements. It seems that in almost every case alternative development or use requires planning permission. Therefore, I should be grateful if the Minister could make clear to me the basis of the assessment of current use value in this situation, both in relation to land currently surplus to operational requirements and to the operating docks which will be used for a while but face eventual closure. Following the 1974 White Paper on land, we had hoped that this position might be clarified, but it seems that it is still in some dispute.
Although Schedule 4 refers to the five main use classes, it does not cover the statutory undertaker's port land because it is not there specified. As far as I can see from reading the definitions in the Bill, it does not fall at present under non-operational dock land, perhaps as it could do at an earlier stage of Schedule 4. As far as I can see, land and buildings within the dock estate may fall within Class D of paragraph 7 of Schedule 4, but in that case the only use that will rank as nonmaterial development and that may be taken into account in arriving at the current use value is dock purposes, or, presumably, something that is considered a comparatively small number of alternative specialist uses.
This is obviously not clear from the schedule as it is now written. The value for dock purposes of a dock which has recently been closed because it is no longer viable would on this basis be quite nominal and so come within the intentions covered by paragraph 33 of the 1974 White Paper on land. This, in turn, would place dock and other transport undertakings in an extremely difficult position and would create immediate difficulties in respect of the valuation of their land for annual accounts at year end.
The amendment to add
docks or other transport purposes
to the schedule would enable the current use value to take account of buildings, including transit sheds, on the land, and would therefore enable redevelopment as for industrial purposes under sub—paragraph (a) or (b) of Class E to take place.
I hope that the Minister can either reassure me that all these matters are

considered elsewhere in the Bill or, preferably, make the situation clear by accepting the amendment. This is a situation that faces not only Liverpool but also the Port of London and a number of other ports as our trading changes over the coming years.

8.15 p.m.

Mr. Michael Spicer: I support the amendment moved by my hon. Friend the Member for Wallasey (Mrs. Chalker). It was remiss of us to miss this point in Committee. As she rightly says, obsolete or obsolescent docks are likely to have a very low current use value. Anything that inhibits development must be bad. I do not know Liverpool, but I know the Port of London. One of the great sadnesses of this metropolis—this great port town as it used to be—is that, unlike every other city that now has changed the use of its docks, London remains an eyesore to a large extent in relation to the old docks. My hon. Friend has raised a matter of great importance.
Although I can understand that the purpose of the Bill is to prevent large amounts of money being made by changes of use occurring, and the Minister will probably argue, in terms of his own philosophy, quite strongly against that, I hope that in some way he can meet my hon. Friend's general point that we face this dock development problem in Britain, and in this city above all. We must be very wary of doing anything which makes London the only major old port city that remains an eyesore. The situation that exists in Hamburg, for instance, is totally different from that in London. It would be a great shame if, through the operation of the Bill when it is enacted, London were prohibited from developing in the way my hon. Friend has suggested. I hope that the Minister will look at this matter sympathetically, although I do not wish to cause him difficulties.

Mr. Denzil Davies: The hon. Gentleman is quite right. This matter causes me some difficulties. The hon. Lady moved her amendment very moderately and put her points very clearly. There are one or two technical points that she mentioned and technical questions that she asked which I cannot answer. However, I shall endeavour to let her have answers to those points. It would not


be fair to try to answer them now, because any answers that I gave would not be adequate.
The hon. Lady's main point was that we must uplift in some way the current use value of these dock lands in order to give them a higher base value, which would mean, presumably, that the owners could sell them off at a higher price and thereby there would be redevelopment.
As the hon. Gentleman recognised, that is in conflict to a considerable extent with some of the purposes behind our land policy. We feel that it would not be right artificially in some cases to raise the current use value in order to create a profit for someone merely by doing so. If local authorities wanted to develop an area for housing, for instance, it would make it much more expensive for them to purchase the land in question. Therefore, there is a conflict.

Mr. Michael Spicer: I do not want to delay proceedings at this late stage but, surely, ultimately there have to be objectives higher than that of simply preventing profits. I am sure that the present Government share with my hon. Friend the Member for Wallasey (Mrs. Chalker) and myself the desire to see an improved environment, for instance, in the Port of London. I am sure that the Minister believes that to be a higher objective than that of simply clobbering profits. One accepts that he will want to tax some element of the benefit here, but surely he can find some way of meeting my hon. Friend's point of increasing the base value in some way.

Mr. Davies: The hon. Gentleman is not correct when he says that I am merely saying "Let us clobber profit." We must try to keep a balance between ensuring a proper return from development and ensuring that the community has some control over the way in which disused land in docks and cities is developed. We must try to balance the needs of the community with those of the individual. This is not the right way to deal with the problem.
The problem of the valuation of disused land was raised several times in Committee. We looked into it during the preparation of the Bill but we felt that the best way to deal with those problems was not in a fiscal measure. It

would be better to deal with it in the context of planning permissions rather than try to create an artificial current use value.
The Department of the Environment is examining the problem of disused land in general, and no doubt the problem of the rundown of docks in the cities will be invesetigated. It is a planning matter, because the whole of the development and the regeneration of the inner cities is involved. It would be wrong to try to go some way to solve that problem by creating an artificial current use value which would produce a greater return to the property owners. There might be a conflict between the community and the individual, but we must solve the problem in a wider concept.
I am grateful to the hon. Member for Wallasey (Mrs. Chalker) for raising the subject. No doubt her remarks will be studied by the Inland Revenue and the Department of the Environment in the context of the problem of inner city areas, disused land and dockland areas in general. We are concerned about the problem, but I cannot accept the amendment, because tax legislation is not the right place to deal with it.

Mrs. Chalker: Although I thank the Minister for his reply, I am still concerned that, without an alteration to the Bill, the development of dock areas will be hindered. Land will be withheld when it should be used for redevelopment, simply on the basis of the valuation. If the Minister is unprepared to move, I beg to ask leave to withdraw the amendment and await a Statutory Instrument to put the matter right at some time in the future.

Amendment, by leave, withdrawn.

Amendment made, No. 157 in page 107, line 46, leave out '1st July 1948' and insert 12th September 1974'.—[Mr. Denzil Davies.]

Orders of the Day — Schedule 5

AUTHORISED DEVELOPMENT ETC.

Mr. Ian Stewart: I beg to move Amendment No. 253, in page 108, line 30, at end insert—
'(c) where, on the facts, it appears to the Board or on Appeal to the Commissioners,


that, on an appeal against refusal of a planning application before 12th September 1974 it could be reasonably expected that a development would be permitted, then the value attributable to the land following that technical refusal shall be treated as stock-in-trade on 12th September 1974.'

Mr. Deputy Speaker: With this we may take Government Amendments Nos. 158 to 164.

Mr. Stewart: Government Amendment No. 158 appears to deal with the same basic point as we raised. I invite the Minister to confirm that.

Mr. Denzil Davies: I do confirm that. Government Amendment No. 158 meets the point raised in Amendment No. 253.

Mr. Stewart: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 158, in page 109, line 2 at end insert—
'(2A) For the purpose of determining what planning permission was in force on 12th September 1974 in a case where—
(a) by virtue of the default provision, the appeals provision applies in relation to an application as if the permission or approval to which the application relates had been refused on or before that date, and
(b) the applicant does not exercise the right of appeal given to him by virtue of the default provision but makes a further application which does not differ in any significant respect from the application referred to in paragraph (a) above,
a decision of a planning authority or, in Northern Ireland, of the Department of the Environment for Northern Ireland made after that date on the application referred to in paragraph (b) above shall be treated for the purposes of the principal section and the preceding provisions of this paragraph as having been made immediately before that date'.

No. 159, in line 3 leave out 'subparagraph (1)(b) above' and insert
'the preceding provisions of this paragraph'.

No. 160, in line 4, leave out `the' and insert 'any'.

No. 161, in line 8, leave out "and" the appeals provision"' and insert '"the appeals provision" and "the default provision"'

No. 162, in line 9, leave out and 36 and insert '36 and 37'.

No. 163, in line 11, leave out and '33 and insert 33 and 34'.

No. 164, in line 13, leave out and 23 and insert 23 and 24'.—[Mr. Denzil Davies.]

Orders of the Day — Schedule 6

INTERACTION OF DEVELOPMENT LAND TAX WITH OTHER TAXES

Amendments made: No. 165, in page 123, line 1, leave out 'six' and insert 'twelve'.

No. 166, in page 124, line 45, leave out 'six' and insert 'twelve'.

No. 167, in page 126, line 5, leave out 'six' and insert 'twelve'.

No. 168, in page 127, line 20, leave out 'six' and insert 'twelve'.

No. 169, in page 130, line 16, leave out 'six' and insert 'twelve'.

No. 170, in page 133, line 8, leave out 'six' and insert 'twelve'.

No. 171, in page 134, line 15, leave out 'six' and insert 'twelve'.

No. 172, in page 135, line 14, leave out 'six' and insert 'twelve'.—[Mr. Denzil Davies.]

Mr. Ian Stewart: I beg to move Amendment No. 173, in page 136, line 29, after 'transfer' insert:
'or account would have been so taken if paragraph 18(3)(b) were satisfied'.

Mr. Deputy Speaker: With this we may take Government Amendment No. 174.

Mr. Ian Stewart: I suspect that Government Amendment No. 174 is the draftsman's expression of the intention in Amendment No. 173. Can the Minister confirm that?

Mr. Denzil Davies: Government Amendment No. 174 meets the point made in Amendment No. 173.

Mr. Stewart: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 174, in page 136, line 44 at end insert:
'(2) If, in a case where the disposal as a result of which the relevant interest was acquired as mentioned in paragraph 18(1)(a) above was a DLT disposal,—
(a) account has not been taken as mentioned in sub-paragraph (1)(a) above of an amount of capital transfer tax chargeable on


the value transferred by a CTT transfer by reason only that the condition in paragraph 18(3)(b) above was not fulfilled, and
(b) the conditions in paragraphs (b) and (c) of sub-paragraph (1) above are fulfilled with respect to the amount of capital transfer tax referred to in paragraph (a) above, and
(c) the additional capital transfer tax falling to be paid as a result of the recalculation referred to in sub-paragraph (1)(c) above is borne by the person by whom the relevant interest was acquired as mentioned in paragraph 18(1)(a) above,
sub-paragraph (1) above shall apply on the basis that the condition in paragraph (b) of sub-paragraph (3) of paragraph 18 above was fulfilled with respect to £1 of the capital transfer tax referred to in that paragraph.'.—[Mr. Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 175, in page 137, leave out lines 10 to 12.

Mr. Deputy Speaker: With this we may discuss Amendment No. 176, in page 137, line 30, at end insert:
'(2) In any case where the disposal as a result of which the material interest was acquired as mentioned in sub-paragraph (1)(a) above would, had it occurred after the appointed day, have been a DLT disposal so that the condition in sub-paragraph 1(c) above is not fulfilled but the consideration for that acquisition was less than that which the material interest might reasonably have been expected to fetch in the open market then, for the purposes of this part of the Schedule (other than this sub-paragraph) the condition in sub-paragraph (1)(c) above shall be taken to be fulfilled.'.

Mr. Denzil Davies: The amendment meets the point raised in Committee and is identical in substance to Amendment No. 176.

Mr. Ian Stewart: I welcome the group of amendments which has just been passed because it is the result of a number of defects in the Bill. We argued our points successfully in Committee and I thank the Minister for giving careful attention to them. Since this might be my last intervention on the Report stage of the Bill, I should like to congratulate the Minister on the way in which he conducted the Bill single-handed in Committee. That is no mean intellectual feat and the Minister should be complimented on his skill and good humour.

Amendment agreed to.

Orders of the Day — Schedule 7

SUPPLEMENTARY PROVISIONS RELATING TO DISPOSALS WHERE DEVELOPMENT LAND TAX DEDUCTED FROM CONSIDERATION

8.30 p.m.

Mr. Denzil Davies: I beg to move Amendment No. 177, in page 142, line 3, after 'authority', insert (a)'.

Mr. Deputy Speaker: With this Amendment we may take Government Amendment No. 178.

Mr. Davies: These amendments are to enable a person whose land is being acquired by a local authority or other "net-of-tax" body to require the acquiring authority to give to the Board of Inland Revenue a provisional notice of acquisition at any time after the consideration is agreed but before the disposal takes place. The amendments will allow the vendor to ensure that a provisional notice is given as soon as the consideration or compensation are agreed or determined. In cases of compulsory purchase this will normally be the occasion on which the acquiring authority is bound to give notice, but if this is not so the vendor will be able to require the authority to give provisional notice at this stage.
The amendments result from the debates in Committee about the point made by the right hon. Member for Crosby (Mr. Page) that on compulsory purchase the net-of-tax provisions possibly did not work as well as on a voluntary sale. The point was raised again in yesterday's debate.
Fears were expressed in Committee that a local authority might enter on the land and force a formula deduction. I am not saying that the amendments entirely meet that point, but they impose on the local authority an obligation to inform the vendor so that he can go to the DLT office at an earlier stage and try to obtain a provisional assessment. They do not remove the problem over compulsory purchase, but we have been able to go a small way towards ensuring that the vendor will have early information and may be able to agree a provisional assessment with the Inland Revenue.

Amendment agreed to.

Amendments made: No. 178, in page 142, line 7, at end add
'but before that disposal takes place, and (b) shall give a provisional notice of acquisition if requested to do so at any such time by the person by whom the material disposal is to be made'.

No. 180, in page 143, line 1, leave out from 'forthwith' to end of line 2 and insert
'give notice in writing to the Board of the correction required or, as the case may be, of the withdrawal of the notice previously given.
(8A) Where, in relation to a material disposal, an acquiring authority give a notice to the Board under the preceding provisions of this paragraph, the authority shall give a copy of the notice to the chargeable person'.

No. 181, in page 147, line 9, leave out from first 'instrument' to 'a' in line 11 and insert:
'but no such regulations shall be made unless a draft of the regulations has been laid before and approved by'.

No. 183, in page 149, line 14, leave out '12th September 1974' and insert 11th May 1976'.

No. 186, in line 42, leave out '12th September 1974' and insert 11th May 1976'.—[Mr. Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 188, in page 150, leave out lines 10 to 12.
The amendment goes some way towards meeting the criticism by the right hon. Member for Crosby (Mr. Page) in Committee over the problem of conveyancing and mortgages. It removes the requirement that the existence of a mortgage or charge must be brought to the notice of the acquiring authority if the creditor is to have the protection given by paragraph 8 of Schedule 7. The right hon. Gentleman objected to this and claimed that it would change the whole procedure of conveyancing and exempt the local authority from the normal duties of a purchaser of property. The amendment meets the right hon. Gentleman's criticism.

Mr. Graham Page: I am obliged to the Minister for making the amendment. It is only a minor improvement, and I object to this procedure altogether.

Amendment agreed to.

Amendments made: No. 190, in line 23, leave out '12th September 1974' and insert '11th May 1976'.

No. 191, in line 29, leave out '12th September 1974' and insert '11th May 1976'.

No. 192, in page 152, line 42, leave out from beginning to 'interest' and insert:
'then, subject to sub-paragraph (2) below, the chargeable person shall be credited with'.

No. 193, in line 45, leave out from beginning to end of line 2 on page 153 and insert—
'(2) If a sum representing the whole or any part of a DLT deduction is paid to the chargeable person before the reckonable date, he shall not be credited with interest on that sum beyond the date of payment.
(3) Interest with which a person is credited under this paragraph—

(a) shall be calculated at the rate which is for the time being the prescribed rate for the purposes of section 86A of the Taxes Management Act 1970 (interest on unpaid development land tax);
(b) shall not be income of that person for any tax purposes; and
(c) shall be treated for all purposes as an amount of development land tax paid by that person to the Board in respect of the material disposal referred to in sub-paragraph (1)(a) above;
and subsection (7) of section 39 of this Act shall apply in relation to any amount treated as having been paid to the Board by virtue of paragraph (c) above as it applies to an amount so treated by virtue of subsection (5)(b) of that section'.—[Mr. Denzil Davies.]

Schedule 8

ADMINISTRATION OF DEVELOPMENT LAND TAX

Amendments made:

No. 194, in page 164, line 13, leave out from 'above' to end of line 18 and insert
'(3A) For the purposes of Part I of Schedule 1 to this Act, notice of a project under subparagraph (1) above is an operative notice if, in relation to the project,—

(a) it is the only notice given under that subparagraph, or
(b) it is the first such notice to be given and no subsequent notice differs from that first notice in its specification of the nature and scope of the project or of the land comprised in it.
(3B) If, in relation to a project of material development, more than one notice is given under sub-paragraph (1) above and no such notice is an operative notice for the purposes of that Part, the Board shall, after consulting


such persons as appear to them to be appropriate, determine what should be taken to be—
(a) the nature and scope of the project, and
(b) the land comprised in the project, and
(c) the date on which the project is begun, and shall serve notice of their determination on each person who, in relation to that project, gave notice under sub-paragraph (1) above.
(3C) On an appeal against an assessment to development land tax, the Special Commissioners shall have jurisdiction to review a determination made by the Board under sub-paragraph (3B) above.'.

No. 195, in page 165, line 16, leave out from "above" to end of line 21 and insert—
(7A) For the purposes of Part I of Schedule 1 to this Act, notice of the additional development under sub-paragraph (5) above is an operative notice if—
(a) in relation to that development, it is the only notice given under that sub-paragraph or
(b) it is the first such notice to be given and no subsequent notice differs from that first notice in its specification of the nature and scope of the additional development or of the land to which that development relates.
(7B) If in relation to the additional development more than one notice is given under sub-paragraph (5) above and no such notice is an operative notice for the purposes of that Part the Board shall, after consulting such persons as appear to them to be appropriate, determine what should be taken to be—
(a) the nature and scope of the additional development, and
(b) the land to which that development relates,
and shall serve notice of their determination on each person who gave notice of the additional development under sub-paragraph (5) above.
(7C) On an appeal against an assessment to development land tax the special Commissioners shall have jurisdiction to review a determination made by the Board under sub-paragraph (7B) above".—[Mr Denzil Davies.]

Mr. Denzil Davies: I beg to move Amendment No. 196, in page 166, line 42, leave out from beginning to end of line 2 on page 167.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take Government Amendments Nos. 197 and 198.

Mr. Davies: These amendments are to narrow the scope of paragraph 39 of Schedule 8 by removing the general power given to the Board of Inland Revenue to require information from any

person who holds, or appears to it to hold, an interest in land, as to the nature of his interest and the ownership of any other interest in that land. They limit the board's powers to obtaining supplementary information from such persons as appear to hold or to have held an interest in land which has been disposed of and where realised development value has or may have accrued on that disposal. They also limit the documents with which the board may require to be furnished to those in the possession or power of the person to whom the notice is given.
As the Bill was drafted, there was a general amendment in paragraph 39 (1) to enable the Inland Revenue—in practice it would not abuse the power—to acquire information from any person who held an interest in land whether it was likely to have development value or not. These amendments limit that power. But again, in fairness to the House, I should explain that in one smaller respect the amendments widen the scope of the paragraph by permitting inquiries to ascertain whether a deferred liability to DLT has been triggered or an election to pay the tax by instalments has to be terminated or modified. This is necessary and reasonable. The paragraph as originally drafted is defective in this respect.
The main purpose is to remove the general power, but a subsidiary effect of the amendments is that the Inland Revenue is given further power in the very limited field of triggering off deferred liability for the termination of instalments. That is a reasonable extension of the power, but the main purpose is to remove the general powers in paragraph 39 (1).

Mr. Graham Page: I am grateful to the Minister for having tabled this amendment. I hope that it will not unduly extend the power of the Inland Revenue, and certainly I hope that it will not be used oppressively. Once such powers are given, they often mean the thin edge of the wedge because it is then said that they are a precedent for further Finance Bills. They have' a habit of being extended. That is why we objected to the original powers. However, the Minister has met us to some extent and we are grateful.

Amendment agreed to.

Amendments made: Nos. 197, in page 167, line 8, leave out from 'notice' to end of line 10 and insert—

'(a) a statement in writing as to the matters specified in sub-paragraph (2A) below, or
(b) such information and documents which are in his possession or power as may be specified in the notice and as may be required by the Board for the purpose of determining any of the matters specified in sub-paragraph (3) below,
or both such a statement and such information and documents.

(2A) The matters about which the Board may by notice require a person to furnish a statement in writing under sub-paragraph (2)(a) above are—
(a) whether he holds an interest in the land specified in the notice from the Board and, if so, the nature of that interest, and
(b) the name and address of any other person known or believed by him to hold an interest in that land.

(3) The matters about which the Board may by notice required a person to furnish information and documents under paragraph (b) sub-paragraph (2) above where it appears to them that there has been such a disposal of an interest in land as is referred to in that sub-paragraph are'.

No. 198, in page 167, line 21, at end add
'and
(d) whether any disposal or other event has occurred which might be the occasion of a charge to development land tax by virtue of section 27 of this Act or which might affect the amount or time of payment of any instalment of development land tax—[Mr. Denzil Davies.]

Mr. Graham Page: I beg to move Amendment No. 228, in page 169, line 3, at end insert—
'(9) (a) A person shall not commit an offence or be liable to a penalty under this paragraph (other than the payment of the development land tax to which he is finally assessed) if he satisfies the court that in the failure of which he is charged he did not act either fraudulently or negligently;
(b) if a person shall be found guilty of an offence or liable to a penalty under this paragraph the maximum penalty shall be one half of the appropriate penalty (otherwise than aforesaid) stated in this paragraph if he satisfies the court that he did not act fraudulently but he is found to have acted negligently'.
This is more than a formal amendment or an amendment to the tax procedures, because tucked away in Schedule 8 there are two paragraphs dealing with penalties—and they are severe penalties. The amendment seeks to ameliorate the effect

of these provisions. I do not mean that it allows people to escape the tax. The paragraph contains severe penalties fur failing to give notices or to undertake some act, even though it may be a quite innocent failure to do so.
In paragraph 41 of the schedule there is need for proof against a person who fails to give a notice or in some way fails to make a correct statement. In other words, it must be proved that such a person acted fraudulently or negligently. Therefore, that paragraph recognises that there should be some guilty or reckless act in failing to give notices. But in paragraph 40 the failure to give notices attracts severe penalties without the need for proof of fraud or negligence. This involves substantial amounts of money, such as a penalty of £500 or an overriding maximum penalty. If failure continues after the end of six months, there is a substantial fine of £5,000.
As the paragraph stands, a person may become liable for these penalties merely due to innocent error. The Minister may say "How are we to know that this was not a deliberate attempt to provide a wrong notice?" The amendment goes some way to meet that objection by saying that a person can be charged with an offence of this sort. It is then up to him to show that he is acting without fraud or negligence. This is fairly severe on the person charged. It shifts the burden of proof that applies in ordinary criminal charges. In short, it is saying "You are guilty unless you have proved yourself to be innocent"—which is not in accordance with British justice as we know it.
I realise the difficulties, when taking action against a person under these circumstances, in being able to prove fraud or negligence—and perhaps it is justified, if the facts are that the notice has not been given, to say "You have failed to give such notice. You were required statutorily to do so and now you must prove that you did not fail through fraud or negligence." I am sure that all of us who have to fill in tax notices and make returns, and so on, would be horrified if we found that in some case where notice has to be given on some transaction at some specific time, we were suddenly liable to a fine of £500, or even £5,000 if we went on failing to give such


notice. As the Bill stands, it is far too severe. There ought to be an escape from it for a person who through no deliberate fraud or culpable negligence fails to give the notice.

8.45 p.m.

Mr. Michael Spicer: This is a major issue. We do not want to start belabouring anything at this late stage, but my right hon. Friend is right. Had we been debating this point at an earlier stage, quite clearly we would have spent time on it. I very much hope that the Minister will respond favourably to this. Over the last three months I and a number of other hon. Members have attended something like 28 sittings of the Committee, and yet even now I cannot claim to understand the details of this Act that is to be, and if I do not do so—with all the reservations that one has about one's ability to comprehend; and I suppose I am not much worse than other normal citizens—I suggest that there will be a mass of people who will not understand this legislation.
One of my hon. Friends tells me that she has been talking to her lawyer on this Bill and that even after some months of study he does not understand it, either. It is an immensely complex Bill, under which people are likely to make mistakes in payment of their tax. One would have thought that at the very least one could have brought in, under this Schedule 8, some kind of safeguard such as that suggested by my right hon. Friend. I do not want to labour the point but it is very important and should be underlined even at this late stage of the business.
As this is the last time that I shall speak on this Bill, and as I appear to be the only Back Bench Member who has served on the Committee left in the Chamber at the moment, I support what my hon. Friend the Member for Hitchin (Mr. Stewart) has said in congratulating the Minister. One does not wish to bestow the kiss of death upon him, and I hope that he will take these words in the best possible spirit. He has fought for his misguided principles with assiduity. It is absolutely right to say, as we have said on many occasions, that in fighting the Bill he has been almost alone against a lot of us. He has shown competence, and we cannot accuse him of not being prepared to answer in depth whatever

points we have raised throughout the whole of these proceedings.
The Minister has shown us great courtesy, and although he was unable to find a synonym for the word "canopy" we forgive him. Although there should be no feeling that yet another deal has been done between the two Front Benches, I offer him my congratulations from the Back Benches.

Mr. Denzil Davies: I am grateful to the hon. Gentleman for his very kind words and, indeed, for staying to the bitter end as the only hon. Member who served on the Standing Committee who had stayed throughout these debates.
The right hon. Member for Crosby (Mr. Page) recognises that there is another category somewhere between fraud and negligence, namely, the category of person who persistently ignores his statutory obligations but who may not be fraudulent or negligent in the sense that he forgets but who deliberately has not sent in notices or has failed to fill in his return. It is recognised in income tax legislation as wilful default, possibly. I do not want to put ideas into the right hon. Gentleman's head, but it is that category of person which one has to meet by using such words as
failure to give or to comply with a notice".
It may not be due to fraud or negligence, but it may be failure due to wilful default in the sense of deliberately ignoring a statutory obligation. In such a case, it is not possible to prove fraud or negligence. That is the problem that the Revenue faces in constructing penalty clauses of this kind.
The penalty will not normally be levied if the failure is remedied before proceedings are instituted. The penalties would not in practice be levied, except in the most blatant case of persistent failure. It would be possible to remedy the failure before proceedings, and in most cases that would be sufficient. If it transpired that there were reasonable grounds for a failure, again the board would have power to mitigate or remit a penalty, and there would be a right of appeal by the defendant to the courts against the amount of a penalty. The defendant could appeal to the courts, just as he can in other fiscal legislation, on the amount of the penalty and also on the question of law.
The amendment would mean that the Revenue would have to prove fraud or negligence in these cases. That would be almost impossible, because it would not be a case of fraud or negligence. Unfortunately, it is necessary to have a phrase like
failure to comply with regulations".
and "failure" covers more than fraud and negligence.
I am afraid that I cannot accept the right hon. Gentleman's amendment. I recognise that this is an important matter. In practice, however, I am sure that it will turn out, as it has on other fiscal legislation, that only the persistent or deliberate failure is penalised. This is not directed at failure through inadvertence, which does not border on negligence or fraud.

Mr. Graham Page: With respect to the Minister, he is reading into the wording something that is not there. If he had put into this paragraph "wilful default" or "wilful failure", I might not have seen the necessity for tabling the amendment, but, as it stands, it is pure and simple "failure". It is not necessary, in proving the offence, to prove that a failure was wilful. The hon. Gentleman is reading words into the paragraph which are not there, and I fear that there may be very serious cases of miscarriage of justice. The word is just "failure". A person will be charged with this offence and committed on the simple wording of the paragraph, and he will be subject to a severe fine.
It is all very well to say that the board afterwards has power to mitigate the fine in these cases. It is wholly against the principles of justice that an executive body should be able to deal with the matter and set aside a decision of the court in that way.
I wish that the Minister had got the paragraph right to start with, because, if he intends this to apply only to the person who wilfully fails to give notice, he should have put it in the paragraph.
It may be that, at some later stage in some other legislation, the Minister will be able to correct this. I wish that we could put it right tonight. But I am worried that, if the clause remains in its present form, it will be used as a prece-

dent in future financial legislation. I can see it coming. We shall then get the sort of case where someone is severely fined just for being a little lax and slack in serving notices.

Amendment negatived.

Mr. Denzil Davies: I beg to move Amendment No. 199, in page 170, leave out lines 26 to 29.
This amendment seeks to reverse the decision of the Committee when the Opposition carried Amendment No. 414. I will not go into the reasons which caused the Opposition amendment to succeed. It might have been the weight of the argument, or other reasons, but it would not be fair to suggest what they might have been.
Unfortunately, though it was accepted in Committee, the Opposition amendment is not acceptable to the Government because it would involve giving reliefs far greater than originally intended in the legislation. They would allow a trader to pay DLT by instalments even though the land disposed of was not currently being used for trading, provided it could be shown that at some time in the past it had been used by someone for some kind of trade. We are concerned that a very wide relief contained in Amendment No. 414, and the wide scope of its provisions, would also lead to schemes of avoidance.
With those magic words perhaps I can ask the House to reverse the Committee's decision because it goes wider than we intended and could create considerable problems of tax avoidance.

Mr. Graham Page: I must protest strongly at the Minister trying to reverse something which he lost on the strength of the argument from the Opposition side of the Committee. He is suggesting that it was not because of the logic or reasoned strength of our argument. He was suggesting that one of his members had got lost in a cabinet—not the Cabinet at No. 10—and was missing from the Committee Room for some good purpose. In fact it was the strength of the argument which carried the amendment, and we are sorry that he should now see fit not to take his defeat graciously but to try to reverse the decision. It was a beneficial amendment for the trade, although not for the Treasury, but that was not what we were aiming at. I am


sorry that the hon. Gentleman is now trying to reverse the decision at this stage.

Amendment agreed to.

Amendments made:

No. 200, in page 170, leave out lines 34 to 38.

No. 201, in page 170, line 41, leave out 'paragraph (b) above' and insert 'subsection (1) of that section'.

No. 202, in page 171, line 14, leave out from on 'to' the' in line 16 and insert
'a disposal of an interest in land or on the occurrence of an event to which sub-paragraph (1) of paragraph 43 above applies is payable by instalments by virtue of an election under that sub-paragraph'.

No. 203, in page 171, line 19, leave out from 'due' to end of line 24.

No. 204, in page 171, line 27, leave out 'relevant disposal' and insert
'disposal or, as the case may be, the event referred to in sub-paragraph (1) above'.

No. 205, in page 171, leave out line 31 and insert—
'(3) In any case where—
(a) the liability referred to in sub-paragraph (1) above arises on the deemed disposal of an interest in land, and'.

No. 206, in page 171, line 39, at end insert—
(3A) In any case where—
(a) the liability referred to in sub-paragraph (1) above arises on the occurrence of an event to which sub-paragraph (1) of paragraph 43 above applies, and
(b) the condition in sub-paragraph (3)(c) of that paragraph is fulfilled,
the number of yearly or half-yearly instalments shall be such that they all fall due before the expiry of the relevant period referred to in sub-paragraph (3)(c) of that paragraph'.

No. 207, in page 171, line 40, leave out 'relevant disposal is' and insert
'liability referred to in sub-paragraph (1) above arises on'.

No. 208, in page 172, line 1, leave out relevant disposal is a' and insert
'liability referred to in sub-paragraph (1) above arises on the'.

No. 209, in page 172, line 2, leave out 'sub-paragraph (1) above' and insert 'that sub-paragraph'.

No. 210, in page 172, line 18, leave out from 'it' to end of line 23.

No. 211, in page 172, line 25, leave out 'relevant' and insert 'deemed'.

No. 212, in page 172, line 32, leave out from 'date' to end of line 35 and insert:
'and in this sub-paragraph "the review date" means the date referred to in sub-paragraph (5)(d) above or, if there is more than one such date, the first of those dates'.

No. 213, in page 173, leave out lines 9 to 40 and insert—
(9) In this Part of this Schedule, "the relevant project", in relation to the deemed disposal of an interest in land, means the project of material development the start of which is the occasion of that disposal'.

No. 214, in page 173, line 45, after first 'of', insert 'an election under'.

No. 215, in page 175, line 23, leave out `relevant disposal is' and insert:
'liability referred to in sub-paragraph (1)(a) above arises on'.

No. 216, in page 175, leave out line 31 and insert—
'(3) Where the liability referred to in subparagraph (1)(a) above arises on the occurrence of an event to which paragraph 43(1) above applies and that'.

No. 217, in page 175, leave out line 39 and insert—
'(4) Where the liability referred to in subparagraph (1)(a) above arises on the occurrence of an event to which paragraph 43(1) above applies and that'.

No. 218, in page 176, line 26, leave out 'the operative' and insert 'an'.

No. 219, in page 176, line 28, leave out 'the operative' and insert that'.

No. 220, in page 176, line 34, leave out 'relevant disposal' and insert:
'disposal of an interest in land (in this paragraph referred to as "the relevant disposal")'.—[Mr. Denzil Davies.]

9 p.m.

Mr. Denzil Davies: I beg to move Amendment No. 221, in page 180, line 11, leave out from 'under' to 'subparagraph' in line 12 and insert—
'(i) sub-paragraph (1) of paragraph 47 above, by virtue of any of sub-paragraphs (2)(a), (3)(a) and (6)(i) of that paragraph, or
(ii)'.
This amendment is partly to correct a reference in paragraph 50(3) of Schedule 8 consequent on the introduction by amendment in Committee of a new paragraph 47, and partly to extend the operation of paragraph 50(3) which deals with payment by instalments where there would otherwise be hardship. The amendment ensures that the benefit of paragraph


50(3) is available in all the cases dealt with in paragraph 47 involving the granting of a lease and is not confined to only one of those cases. The amendment is a consequential and relieving amendment. The original drafting did not make the matter clear.

Mr. Graham Page: I am grateful to the Minister for making this clarification. Perhaps I might add my congratulations to those which have already been expressed by my hon. Friends. We are sincerely grateful to the Minister. We have thoroughly disagreed with some of his amendments and some of the clauses. One would have thought that that hatred of the Bill might have been passed on to the Minister, but no such thing occurred. We are grateful to him for paying attention to all we have put forward and for doing so graciously in certain cases and meeting our points in so many cases. We congratulate him and are grateful to him.

Mr. Denzil Davies: I thank the right hon. Gentleman for his kind remarks. He has ensured that this Bill has been dealt with adequately and in great detail. I know that we disagree on fundamentals but I am sure that we now have a technically better Bill than we should have had if the right hon. Gentleman had not been leading for the Opposition. As I said in Committee, he picks up one's bad points very quickly, which is unfortunate, but at least he recognises one's good points and that made our Committee deliberations much easier. I am grateful to him.

Amendment agreed to.

Amendments made:

No. 222, in page 180, line 28, at end insert:

"51A.—(1) This paragraph applies where—
(a) as part of the transfer of his business to a company a person disposes of an interest in land to the company, and
(b) on that disposal (in this paragraph referred to as the incorporation disposal') the chargeable person becomes liable for an amount of development land tax (whether in respect of realised development value accruing on that disposal or by virtue of section 27 of this Act), and
(c) the transfer of the business is one where, for the urposes of Part III of the Finance Act 1965 (capital gains tax, paragraph 15

of Schedule 19 to the Finance Act 1969 applies (special rules on transfer of business as a going concern to a company).

(2) Where this paragraph applies, so much of the development land tax referred to on sub-paragraph (1)(b) above as apears to the Board or, on an appeal, to the Commissioners concerned to be just and reasonable shall not become payable until such time as may be determined in accordance with sub-paragraphs (4) to (6) below; and in the following provisions of this paragraph the amount of tax which does not become payable until that time is referred to as "the postponed tax".

(3) In determining under sub-paragraph (2) above the amount of the development land tax referred to in sub-paragraph (1)(b) above which is to be the postponed tax, the Board or, as the case may require, the Commissioners concerned shall have regard to the proportion of the consideration for the transfer of the business referred to in sub-paragraph (1)(a) above which consists of shares.

(4) If at any time within the period of eight years beginning on the date of the incirporation disposal there is a disposal—
(a) of any of the shares comprised in the consideration for the transfer of the business concerned, or
(b) of the interest referred to in sub-paragraph (1)(a) above or of any other interest in land which is derived, directly or indirectly, from that interest,
so much of the postponed tax as may be determined by the Board under sub-paragraph (5) below shall become payable at the time of that disposal.

(5) In making a determinatoon under subparagraph (4) above in relation to a disposal of shares or an interest in land, the Board shall have regard—
(a) to the proportion of the consideration for the transfer of the business or, as the case may be, the proeortion of the value of the interest disosed of; and
(b) in the case of a disposal of an interest in land which is a deemed disposal, to the extent to which liability for development land tax on any realised development value which accrues or might accrue on that deemed disposal is or would be deferred under any provision of this Act.

(6) At the expiry of the period of eight years beginning on the date of the incorporation disposal, there shall become payable so much of the postponed tax as had not previously become payable by virtue of subaragraph (4) above.

(7) In this paragaph 'shares' includes stock.".

No. 223, in page 180, leave out lines 31 and 32.

No. 224, in page 180, line 41, leave out "'the relevant disposal' and".[Mr. Denzil Davies.]

Bill to be read the Third time tomorrow and to be printed. [Bill 178.]

SUPPLEMENTARY BENEFIT (AMENDMENT) BILL

Order for Second Reading read.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): It may be helpful if, at Mr. Speaker's request, I inform the House at this stage that the scope of the Bill is narrow. It is limited to amending the extent to which earnings and other allowances are to be disregarded in the calculation of entitlement to supplementary benefit.
The Bill does not cover the provision of child benefits, and debate on the child benefit scheme itself, or alternative schemes for child and children's allowances, would not be in order. The House will in any case now be aware that an early opportunity will arise for a separate discussion of this matter.

9.5 p.m.

The Minister of State, Department of Health and Social Security (Mr. Stanley Orme): I beg to move, That the Bill be now read a Second time.
The Bill is simple. It has two objects. The first is to increase the amount that a single parent may earn without affecting the amount of his or her supplementary benefit.

Mr. Kenneth Clarke: I should like to know whether it will be possible for the Minister, in presenting his Bill, to find a solitary Labour Back Bencher who will come into the Chamber and provide some signs of interest from the Government Benches in respect of this Bill, which affects one-parent families.

Mr. Orme: That is a somewhat facetious comment. The three hon. Gentlemen sitting behind the hon. Member for Rushcliffe (Mr. Clarke) may seem many when there is nobody sitting behind me. However, I should have thought that those in glasshouses should not throw stones, as I do not think that the Opposition may include the Members of the Liberal Party in the their total.
The present position is that single parents, like most other people receiving supplementary benefit, may earn up to £4 a week without any reduction in their benefit. Those who are required to register for work—that is, broadly speak-

ing, the unemployed—may have up to £2 of earnings disregarded.
In a two-parent family on supplementary benefit the mother may earn up to £4 and the father—assuming that he is unemployed and signing on for work—may earn £2, making a total of £6 without the family's benefit being affected. A one-parent family is therefore somewhat at a disadvantage because, as there is only one wage earner, she or he cannot at present have more than £4 disregarded. I should remind the House, however, that anything his or her children earn is disregarded entirely. This was the result of an amendment that we introduced in the Social Security Benefits Act 1975. Previously, only £1 of any child's earnings had been disregarded.
But I think that there are other reasons for allowing a higher disregard for single parents. As the Finer Report said, the disregard:
helps parents who can do the occasional or small job while spending most of their time looking after their family, and may thereby obtain some personal satisfaction and increase social contacts as well as extra income.
Having a small part-time job, apart from the importance of the income, may help to relieve the loneliness and isolation that many single parents feel. It will also help them to keep in touch with the employment field and so make it easier for them to get back into full-time work when the children are older and do not need so much of the mother's or father's time.
The purpose of the supplementary benefit scheme is to bring a person's income up to a guaranteed minimum level. In principle, any income a person already has should be taken into account. National insurance and industrial injuries benefits are, for example, mostly taken into account in full. If any resources are disregarded this means that the person in question enjoys a higher income than other people receiving supplementary benefit. It would therefore be unfair to increase the disregards for any one group disproportionately.
We also have to consider the cost. About 36,000 single parents are taking advantage of the present disregard. That is the number who are known to have any earnings—though there may of course be more who, from time to time,


earn amounts not exceeding £4, which they are not required to report.
We estimate that the cost will be about £1¼ million in a full year for the 15,000 single parents on supplementary benefit who are already earning more than £4. There will probably also be some further additional expenditure, because some single parents whose income, including part-time earnings, at present puts them above the supplementary benefit level, may be able to claim up to £2 of benefit on account of the higher disregard. Our hope is that the increase in the disregard will make it seem worth while for many more single parents to undertake part-time work. This will not cost any more in benefit payments.
I come to the second part of the Bill, which provides for the discontinuance of certain small disregards attached to the children's portion of widows' pensions and allowances. The pensions and allowances involved are national insurance widowed mothers' allowance, industrial death benefit and war widows' and similar pensions. I must make it clear how the disregards originally found a place in the scheme. Although this is a small amendment it is important to the many people who receive it and I ought, therefore, to go into a little detail to explain the thinking behind the Government's policy.

Mr. Patrick Jenkin: The Minister need not make any apology for spending some time in explaining why any benefit is being withdrawn, however small. The Government owe it to those concerned to explain clearly what is being done and why.

Mr. Orme: I hope to show that this withdrawal of benefit will not be disadvantageous. These disregards found a place in the scheme in the following way: in 1964, before the supplementary benefit scheme started, an increase was made in the children's allowances attached to the widows' pension at a time when no other benefit changes were taking place. To ensure that those widows who received national insurance benefits would benefit from that increase, it was decided that the amount of the increase—7s. 6d. for each of the first two children, and 5s. 6d. for each subsequent child—should be dis-

regarded in calculating national assistance.
These unique disregards have continued since. They have never been increased, but on decimalisation they became 38p for each of the first two children and 28p for each subsequent child. However defensible the introduction of these disregards was, they would have remained anomalies since the general principle is that the main national insurance benefits, including the additions for dependent children, should be taken into account in full when assessing what supplementation is necessary. To do otherwise is to provide twice over from public funds for the same purpose.
When the supplementary benefit scheme was introduced in 1966 it was felt to be too soon to abolish these disregards, which had so recently been introduced. They were therefore allowed to remain. Now, however, and in conjunction with this measure to increase the earnings disregard, which can be of potential benefit to all one-parent families, we think the time has come to stop awarding them to new claimants. I strongly emphasise that existing claimants who already have the benefit of these disregards will not lose them.
The Bill is so constructed that provision for the disregards remains on the statute book for all those who have what are to be known as "preserved 1976 rights." All those claimants who now have the disregards will continue to receive them for as long as they continue to receive supplementary benefit in conjunction with the widows' benefit or other benefit involved. If, as sometimes happens, entitlement to supplementary benefit ceases because the widow enters hospital, that gap in entitlement will not affect her preserved rights; neither will other gaps in entitlement due, for example, to spells of employment if they are not longer than three months.
The existence of these preserved rights will mean that it will take a good many years for the disregards to work fully out of the system. Until they do, the Exchequer will not benefit by the full amount that is expected to be saved eventually. But we accept that it is right to protect the interests of existing claimants in this way.
By ceasing to apply the disregards to new claimants we shall be making a small but useful contribution to the simplification of the supplementary benefit scheme, which we all want to see. I am sure that hon. Members on both sides of the House will agree that the scheme is already far too complicated. It is difficult for claimants to understand all that they are entitled to, and this presents tremendous problems to the staff, who do their best to ensure that everyone gets his fair entitlement. I hope that the House will agree to the removal of this out-dated anomaly.
The Bill will bring an immediate benefit to about 15,000 single persons receiving supplementary benefits who are already earning more than £4 a week, and potential benefits to many more, since it will make it more worth while for them to undertake employment.
I commend this modest Bill to the House as a worthwhile step forward in our efforts to help one-parent families, while at the same time by phasing out the disregards on widow's benefits we start to rectify the long-standing anomaly in the supplementary benefit scheme.

9.17 p.m.

Mr. Kenneth Clarke: I welcome the Minister of State to the Dispatch Box in his first appearance on the Treasury Bench in his new role. We welcome him to the discussions on social policy. He has made a considerable contribution to Northern Ireland policy, and we await the advances he can bring to this Government's social activities. It is a pity that the Labour Party is not able to support him on his first appearance. Only his ministerial colleagues and his PPS are present to hear him tonight. It is extraordinary that the Labour Party in the House tonight is outnumbered not only by the Conservatives but by the Liberals, the Welsh Nationals, and the Social Democratic and Labour Party who have all succeeded in having Members present while the entire Labour Party seems to be otherwise engaged.
The official Opposition will in no way oppose or obstruct this legislation, but the Minister will not be surprised to hear that we give it only fairly faint praise. It is a small Bill with a very narrow and limited compass indeed. This is

becoming fairly familiar in the realms of social policy, because the Government have so mismanaged the economy, and are so suffering from the consequences of the social contract, that they are unable to contemplate financing any major advances in the social field.
This Bill is something of a sop to single-parent families. It is an attempt to console them for the fact that there will be no significant advance in Government help to the poorest single-parent families in this country.
The Bill, with its small but worthwhile changes, is simply a means of diverting attention from the collapse in the Government's policy of family support, and their failure to do anything effective for one-parent families. This is the general style of government in this field at the moment. We have become accustomed to Government legislation being small diversionary measures brought forward in the hope that no one will notice that they are unable to produce anything more substantial.
There was a rather ridiculous attempt to make this a more dramatic diversion by picking a quarrel with the Opposition over where the debate should take place. A member of the Government issued a statement to the effect that we were not allowing the Bill to be taken upstairs. At one stage, we contemplated agreeing to its being taken upstairs, but that was before the dispute in this House arising from another matter. Of course in the situation which then existed in the House it was unreasonable to expect the Opposition to make way on the Floor of the House for other undesirable and controversial legislation while enabling this Bill to be taken upstairs. In any event the question of one-parent families is important enough to be debated on the Floor of the House.

Mr. Orme: I will not enter into that argument because there is a very good retort from our side of the House to it. When the hon. Gentleman criticises the Bill as being small and says that the Labour Government ought to be doing more about the problem he should bear in mind that the first disregard was £2 in 1964, which increased to £4 in 1975 and is now being increased to £6. Will he tell us what his Administration did between 1970 and 1974?

Mr. Clarke: I could give a long discourse on what we did including setting up the Finer Committee which is where the Bill originates. I am not surprised that the Minister of State does not enter into the point I was making about the Government's attack on us for not agreeing that the Bill should be taken upstairs. There is a joint statement from the National Council for One-Parent Families, Gingerbread and the Child Poverty Action Group which condemned the Government's attempt to create an unnecessary parliamentary fuss about the Bill. They said that they deplored
the Government's crude attempts to pick a fight with the Opposition in a feeble attempt to divert attention for its failure to introduce a one-parent family allowance and its U-turn on Child Benefit. The three groups are writing to the Secretary of State for Social Services and the Opposition spokesman asking for the Bill to be taken on the floor of the House. They point out the advantages of a full debate on the Government's record for one-parent families before the 2nd anniversary of the Finer Report's publication on 2nd July 1976".
However, we must not be diverted from the worthwhile part of the Bill by the fact that it was all that the Government could produce since they lack the ability in present circumstances to produce anything more. We go back to the Finer Report, published in July 1974. That report was initiated by the Conservative Government and it was presented and published when the Labour Administration had taken office. The Bill corresponds to recommendation 121 and it has taken two years for the Government to produce the Bill.

Mr. Orme: The hon. Gentleman has a great reputation in my Department for being accurate on his facts. I respect his ability, but he should correct himself on one point. The Finer Committee was set up by Dick Crossman in 1969.

Mr. Clarke: I do correct that. The Committee was set up in 1969 but it took a great deal of time to report. The central recommendation of the report was a guaranteed maintenance allowance, which was rejected for different reasons by both sides of the House, but largely because neither side thought it wise to contemplate a new means-tested benefit for the support of single-parent families, and because it was an extremely expensive way of dealing with the matter which neither side thought it possible to implement.
However, help for the single-parent families had to be looked for amongst these recommendations and action had to be considered. We always preferred rapid development of the child benefit scheme, and had we been successful in urging the Government to introduce it in April 1976, the idea was that we could refine it by 1979 to include age-related benefits and a premium for single-parent families. The Government contemplate things and so they do nothing. They delayed the child benefit to April 1977 and then introduced for one-parent families the child interim benefit which has now become payable.
We regard that as unsatisfactory for many reasons outside the scope of this debate—related, for example, to the question of taxation on family income for single-parent families. One of our objections to the introduction of child interim benefit was that it did nothing for the very poorest one-parent families. It is not disregarded for supplementary benefit, so for the 280,000 single-parent families receiving supplementary benefit the child interim benefit actually produces no improvement. Of the 250,000 single-parent families, only the 15,000 in part-time work will get an increase in the disregard from £2 to £4 with effect from November 1975.
One of the earliest suggestions from this side of the House was that another way of helping the poorest families on supplementary benefit would be to do something about the level of disregard. We pressed for this policy. In October 1975, when we at last debated the Finer Report, the Secretary of State had nothing much to offer one-parent families and her only announcement was a hint that she was considering action of the kind now incorporated in the Bill by increasing the disregards for single-parent families. She has since announced the rate. This is the latest in a series of small announcements. It was made at that time because the Government were unable to announce anything more substantial.
The Bill will benefit only 15,000 single-parent families out of more than 250,000 currently receiving supplementary benefit. I know the Minister of State has shown that other people may be helped, but that will make only a tiny difference to this total.
The final irony in this rather pathetic story of how the Government have been scratching about offering the odd item to single-parent families is that the policy is being presented and debated against a background of the complete collapse of the Government's policy for family support in the far more important area of child benefits—which we are to debate on Monday. This latest sop will make a very limited impact and will divert no attention from the matters we are to consider next week.
Against that background, we look as sympathetically as possible at the provisions of the Bill. The process of giving a special disregard for one-parent families, as opposed to other supplementary benefit recipients, must be seen as a temporary expedient. It would be wrong for the Bill to become the first in a line of measures giving different levels of disregard for selected categories of beneficiaries.
That would lead to complications in the system which neither side of the House would wish to see. This is a temporary expedient but no more substantial advance in family support is being made. Something must be done to give extra encouragement to single-parent families with some part-time work.
When we have a proper system of family support, based presumably on a child benefit scheme, the distinctions in the level of disregard for one-parent families can be brought to an end and when the disregards are next raised for all beneficiaries the general level will presumably be brought into line with that for one-parent families. I trust that is acceptable to the Government and that they do not intend to have different levels of disregard for different categories of beneficiaries.
There is a problem about the cohabitation rule—a thorny subject in our social security legislation. It comes up again here, as it is bound to do in any special provision for single-parent families.
Clause 1(1)(c) of the Bill refers to the cohabitation rule as a necessary precondition for the higher level of disregard. This is inevitable. It would be wrong to have anything for single-parent families if they were not living as single

parents, but it is another reason why this should be only a temporary expedient.
I trust that in the Bill's operation it will be the modified system of the co-habitation rule that will be applied in practice. The Government have recently made announcements about improvements in the application of that rule as regards individual claimants, but they have been held up by the lack of training of the staff. I hope that the Minister will be able to say whether any progress has been made in carrying out that necessary training so that the new method that will apply to the cohabitation rule will be brought into practice.
My other reservation about the Bill's provisions for dealing with one-parent families is that unfortunately they are not worth very much against the present economic background. That is inevitable as the Government cannot afford to make the provisions worth very much. Their economic mismanagement has deprived them of the resources to allow them to do so. As the right hon. Gentleman has said, disregards were fixed at £2 each week as long ago as November 1966. There was a long and sad gap between then and November 1975, when they were increased to £4. In the meantime, the value of disregards fell substantially. It became a pressing priority and policy to increase them.
The level of £6 does not represent any great advance on the £2 that was established in November 1966. That £2 would be worth about £5 now. The £4 which the Government introduced in November 1975, thanks to the accelerating rate of inflation in recent times, would now need to be about £4·30 to reproduce its original value. The £6 that is being offered to one-parent families is not greatly above the real value of disregards for supplementary benefit fixed as long ago as November 1966. That is the disappointing aspect of the improvement that is now being offered.
The question of later disregards for supplementary benefit is an important priority and policy. It should remain a priority among those on both sides of the House who are interested in trying to minimise the disincentive effect of means-tested supplementary benefits by having


as adequate a level of supplementary benefit as possible. Those are my reservations and comments on the detailed provisions of the Bill as regards one-parent families.
The other feature of the Bill—namely, ceasing to disregard certain allowances for the children of widows—is a matter that needs to be gone into in a little more detail in Committee, although not in very great detail. Potentially it is quite important financially because according to the Government's explanation there will be a saving of £500,000 per annum to be set off against the £1·25 million spent on one-parent family disregards.
My first reaction is that it is welcome for the reasons given by the right hon. Gentleman. It is normally the case that national insurance benefits are not disregarded for supplementary benefit purposes. That is an anomaly that sooner or later has to be removed. The only aspect we want to examine is preserved rights for beneficiaries. I hope we shall hear that about 13,000 of them will have their position protected. My understanding is that if they are now having their benefits disregarded, they will continue to have only 1976 preserved rights until they cease to collect supplementary benefit altogether, or cease to collect it for a 13-week break or more. After such a break, they will never be able to have the children's addition to their widows' benefit disregarded. That means that the 13,000 will be steadily whittled down and that fewer people will have the disregard.
It follows that the £500,000 the Government are hoping to save will be very much an eventual saving. It could be years and years before the first £500,000 is saved in any one year. We shall want to ensure, although it seems to be right from the Minister's recommendations, that the position of the beneficiaries is being properly protected. We accept that the anomaly should be ended.
That concludes my remarks on the narrower aspects of the Bill. The right hon. Gentleman probably feels that I have given the Bill faint praise, but I want there to be no mistake about our attitude. We welcome the fact that 15,000 single-parent families will now be able to keep £2 more of their earnings. We are glad of that, and we accept that there is that limited advance. For that reason we shall

give the Bill a smooth and easy passage now that the Government have presented its Second Reading on the Floor of the House.
I have given plenty of reasons why we are not throwing our hats into the air or getting carried away with wild excitement about a major social advance. The Bill could not possibly merit any such description. It is rather typical of the Government in social policy generally and towards one-parent families in particular. The Government are reduced to dotting the i's and crossing the t's where the dots and the crosses are not there already, or adding footnotes to their social policy when at present they do not have a text.
All this illustrates that the Government's mismanagement of the economy has meant their complete collapse as regards a social policy, and apart from odd, tiny worthwhile crumbs of this kind, the poor, certainly poor one-parent families, will have to wait for a very dramatic improvement in the management of our economic and financial affairs before they can see any worthwhile advance and an end to their present difficulties.

9.37 p.m.

Mr. Gerard Fitt: It is rarely that a Member representing a Northern Ireland constituency can take part in a debate on a Bill as it applies to the United Kingdom. The concluding words of the hon. Member for Rushcliffe (Mr. Clarke) have made my participation in the debate worth while. I listened to the whole of his speech to hear whether there was any possibility that had the Conservative Party been in power, Conservative Members could have improved on the Bill and brought in greater benefits for those affected by this legislation.
I agree with the hon. Gentleman on one matter. My right hon. Friend the Minister of State is a Member who was deeply involved in Northern Ireland until fairly recently. He has shown deep humanity and compassion in regard to the problems of Northern Ireland. I have never been in any doubt that when he was brought back into the main stream of British politics he would still be involved in attempts to defend those who could not defend themselves.
This Bill may not do everything that is wanted by hon. Members on the Government side of the House. However,


given the economic circumstances and conditions with which this country is now confronted, at least it is an attempt to bring us one little step along the way to trying to provide for people who are not in a position to defend themselves—sone-parent families.
I listened to the hon. Member for Rushcliffe to see whether he would say that the Conservatives would do more than the present Government are doing. However, all that he did was to criticise what the Government are doing. His brief contained a mass of academic and technical information and figures, but at the end of his speech I had left in my mind the same question that was there before he rose to the Dispatch Box—what would a Conservative Government have done, had they been in power, for the category of people who come within the provisions of the Bill?
Northern Ireland is an integral part of the United Kingdom. I accept it as being so. I have been a Member of this House for almost 11 years, and in social security benefits and laws I have never seen the Conservative Party showing any humanity and compassion.

Mrs. Lynda Chalker: The hon. Gentleman has been away too often.

Mr. Fitt: I have been a Member for 11 years—long before the hon. Lady ever became a Member. When right hon. and hon. Members of the present Government were in Opposition, I remember them trying to put forward motions and to introduce legislation to try to better the way of life of people who were in no position to defend themselves. That is why I am here tonight.
The hon. Member for Rishcliffe has criticised the Government. He has said: "The Government are wrong; the Government have not done this, or done that; the Government will not do something else, and should have done the other thing." But the Conservatives will come to the House on Monday or Tuesday next week and demand cuts in public expenditure. They will ask for cuts in everything. They will say "Throw people on the dole". I find it difficult to understand the schizophrenic attitude of the Opposition. Hon. Members on the Conservative Front Bench are always shouting for a cut in

public expenditure. They should say that the Government should not introduce this legislation. If the hon. Gentleman were honest, he should say "Do away with the Bill. Do not introduce it. We are opposed to the Bill, because it will mean an increase in public expenditure."

Mr. Kenneth Clarke: The hon. Member for Belfast, West (Mr. Fitt) will recall that I said that it is not possible for the Government to do more than is proposed in the Bill because of the social contract and their mismanagement of the economy. If he thinks that that makes my argument inconsistent he should compare what the Government are proposing to spend on one-parent families with the amount to be spent on nationalising the aircraft and shipbuilding industries. Our arguments on public expenditure are not attacks on social priorities.

Mr. Fitt: In 1973–74 the Conservative Government put forward a philosophy and policies that were totally rejected by the electorate in February and October 1974. If they had put forward compassionate social and economic policies they would have been supported by the United Kingdom electorate, but they failed abysmally.
The credibility of the Conservative Front Bench is not enhanced by their carping criticism of the Labour Government and particularly of the Labour Minister who is handling the Bill. Let the Conservatives stand up and say what they would do if they were in power. The people of the United Kingdom would then have a chance to decide. The Conservatives are attempting, in a rather bitchy way in Northern Ireland, to criticise that which everyone else is attempting to do, without putting forward any constructive alternative. That is why I support the Bill and why the majority of people will support it. They will look with contempt at the speech by the hon. Member for Rushcliffe.

9.44 p.m.

Mr. Peter Bottomley: I am glad to be able to follow the speech by the hon. Member for Belfast, West (Mr. Fitt) because he may have missed something that my hon. Friend the Member for Rushcliffe (Mr. Clarke) said. He gave a welcome to the Bill. It is the


implemention of one of the Finer proposals—No. 121. Forty of the proposals out of over 200 are being acted on, but that still leaves the more important and expensive ones untouched.
The hon. Member for Belfast, West should have looked through the 1974 election manifestos of the Labour, Liberal and Conservative Parties because he would have found that there was unanimity on an issue which I shall not go into today, because it was the child benefit scheme—the child endowment or the credit for children scheme, whichever title he prefers. Perhaps one of the reasons that there was not a fuss about that in October or February 1974 was that the three major parties were agreed. The election kerfuffle involved matters of disagreement.
During the past two years the Labour Government have spent money on many things against which most people voted—nationalisation and the extension of indiscriminate subsidies, which have made this country far worse off because of an over-burden of Government spending, combined with the effect of withdrawing help that all of us would like to give to those in most need. I am sure that the hon. Gentleman, like me, would judge a society by the way in which it treats widows and children. By that test—the way in which we treat one-parent families, whether headed by a man or a woman—we stand condemned.
What can be done? We should start by saying what we are prepared to give up if we want to see increased benefits for those who need them most. As Members of Parliament, we earn £5,750 per year, substantially more than nearly all one-parent families and two or three times as much as the 300,000 one-parent families on supplementary benefit.
We receive more than our fair share of the £500 million spent indiscriminately on subsidising food. I should be happy to give up my share of the food subsidy. I have a wife and two children. My children benefit from the school meals subsidy, which costs £382 million per year. It has gone up drastically in the past two years, and it went up in the years before that. I pay 15p a day for each of my children's school meals, which cost more than 41p a day. That is a

subsidy of 26p per child each day, amounting to more than 50p a day for my two children, five days a week—a £2·50 subsidy each week.
I do not believe that I deserve that. It would be better if it could go to providing more help to those who need it. Instead of making a blanket criticism, which we are often tempted to do, instead of saying what we want for ourselves, we should say what we are willing to do without so that others may have what we agree they need.

Mr. Fitt: I am completely in agreement with the hon. Gentleman. I may not agree with the salary and tax allowances that we receive for the job we do, but does not the hon. Gentleman agree that there are many ways in which he could help others, if he had the humanity and compassion of which I spoke earlier, if he had a conscience about receiving benefits which should go only to those in greater need? I have many ways of giving to charities and under-privileged people in Northern Ireland. I could show the hon. Gentleman the stubs in my cheque book. One does not have to take advantage of the tax situation and then say in the House "I am a beneficiary." One can use whatever benefits there are to help one's constituents or people throughout the United Kingdom.

Mr. Bottomley: I take the hon. Gentleman's point. But my point concerns indiscriminate benefits going to people who do not need them. We can all make a case for higher earnings. One of my first votes in the House was for substantially higher pay for Members of Parliament. But I do not believe in a system which scatters food subsidies around to people with twice the average income.
If I took you, Mr. Deputy Speaker, and the hon. Gentleman out for a meal, and if we spent £20 on lashings of cheese, butter, bacon and all the other foods which are subsidised, we should be receiving considerable benefit from those food subsidies. With indiscriminate subsidies it is impossible to give the help to those who really need it.

Mr. George Cunningham: On this principle, does that mean that the hon. Gentleman


would support any move to abolish tax relief on mortgages above the basic rate of tax, which is not only giving an indiscriminate high level of relief but giving it indiscriminately in favour of those who are most wealthy? Will the hon. Gentleman support any move to abolish that?

Mr. Deputy Speaker: Order. I think the hon. Gentleman is being led slightly astray.

Mr. Bottomley: My answer to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) as an individual is "Yes". The sooner we get to the stage of rationalising our housing situation, the better. This includes the effect of Land Acts and of the forbidding of council tenants to put their money where they would like in housing and the effect of having such high levels of taxation that we have to have income tax allowances. I hope that perhaps we can find a consensus in fields such as that where we are willing to make sacrifice ourselves. Perhaps we can join together and establish the middle ground which will enable us to have a sensible housing policy and family income support. I congratulate the hon. Member for Islington, South and Finsbury, who is willing on occasions to put his vote where his hopes and ambitions lie in these fields.
If we were to spread the £1·25 million among the 600,000 one-parent families in this country, and took away the £500,000 which will be saved from the children's disregard, we should be sharing out £750,000. This would come to just over £1 a year, or just over 2p a week week, each. This is at a time when we have had massive increases in Government spending—£7,000 million a year in real terms in the last two years.
Last year many of us had an increase of £6 a week, and this year many of us will have an increase of £4 a week. That is £10 a week for many people at work. But the one-parent family has averaged only 2p a week. Obviously, that is not a very fair comparison. If we were to take the whole of the £1·25 million and distribute it among the 300,000 families on supplementary benefit, it would come to 8p a week—four times as much—but that is still not a large amount.
If that is the best this House can do, we should take the advice of the Con-

servative Party—put forward week after week for the last two years—and look at both the total of Government spending and the priorities.
It is interesting to note how few of us are here this evening. I wonder what would have happened if we had been dealing with another group of people, perhaps 300,000 miners, or people in some other occupation. Suppose we were proposing to allow them to earn only an extra £2 a week before they suffered from an income tax rate of 100 per cent., would there be just a handful of Members here? Or would there have been 186 Members such as myself, who are members of unions—185 of them actually sponsored by their union? I sure that the attendance would have been very different. But just because we are talking about 300,000 one-parent families and their children, we have an almost deserted House.
We all know the disincentive of high rates of taxation. Perhaps we are talking only about 15,000 people who are earning potentially up to the £6, but they will be facing a marginal rate of taxation of at least 100 per cent. when they start to move between the £6 and their supplementary benefit entitlement. In between they get nothing extra at all. It is a disgrace, and they are being let down because there are so few of us here to take part in the debate. Let us remember that a child who was born when the Finer Committee was set up will now be seven years old.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I am sure that the hon. Gentleman would not want to give the House or the country a misleading impression. The fact that there may be no more than a dozen or so hon. Members present for this debate does not mean to say that this small, essential and useful Bill is not fully supported by the two major parties, and possibly by other parties as well.

Mr. Bottomley: I am grateful for that intervention. I thought I dealt with that question when I said that there was general support for the Bill. The point I tried to make was that had we been dealing with 300,000 workers in the mining industry, we may well have had present in the Chamber a much larger number of Labour Members.
I conclude by making three points relating to the situation of one-parent families. My understanding is that a head of household in a one-parent family who is at work will receive the benefit of disregards week by week. If a person has a casual job and earns perhaps £12 the first week and nothing the next week, I understand that there is no way of averaging out earnings. I hope that the Minister will be able to tell the House whether that view is right and whether there will be any averaging out in terms of family supplement.
The second point is an economic one. It must be appreciated that in the range with which we are dealing there are not that many jobs around. Indeed, the fact that 15,000 people are affected by the increase in disregards shows how many people find difficulty in finding a job.
The third point is that if we want to encourage heads of one-parent families to go out to work, we must make it possible for such families to take advantage of day-care facilities. We cannot rely only on local authorities. We must also encourage voluntary efforts of the kind that have made the pre-school playgroups such a success in recent years.
There is much more to be done, and we cannot yet congratulate ourselves on what we have achieved. The reason the Government changed the guaranteed maintenance allowance was based on the fact that the child benefit allowance was about to come in. Since we are now in the situation in which a child benefit allowance is not to be paid, the Government should see what more they can do.

9.58 p.m.

Mr. Bob Cryer: The House is empty, not because of lack of interest in this subject but because of the confusion that has arisen about tonight's business. This has occurred because of the breakdown in the usual channels. The business of Parliament and our procedures are being undermined by the sulky attitude adopted by the Opposition in the past few weeks.
I must say at the outset that, although this is a minor Bill, I welcome it.

Mrs. Chalker: The hon. Gentleman may have forgotten what happened on 27th May—a matter that the Opposition

sought to clear up yesterday. The hon. Gentleman will have a chance next week to state his views on that topic, and I hope that he will do so. However, the reason why this Bill has come on for debate a little later than was anticipated is nothing to do with that issue but is—

It being Ten o'clock, the debate stood adjourned.

Ordered,
That the Supplementary Benefit (Amendment) Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr Tin.]

Question again proposed, That the Bill be now read a Second time.

Mrs. Chalker: The reason why the Bill has come up for debate a little later than we thought has nothing to do with the difficulties in the usual channels; it is due to the complexity of the Development Land Tax Bill, which the House has been discussing for the past three days and for which proceedings the hon. Gentleman was certainly not present today. The fact that so complex a Bill needed to be thoroughly examined in this House put back the Bill that is now before the House.

Mr. Cryer: I cannot understand how the hon. Lady could know whether or not I was here. I came into the Chamber now and then, and I did not see the hon. Lady; but it is rather a petty argument. I recall the events of 27th May, when the Conservative Opposition chose, on a technicality, to stop the passage of a Bill which affects a number of jobs and may well place people in such difficulties that they must have resort to supplementary benefit. For the Opposition to take this attitude of pious virtue is hardly relevant to the position that we are facing tonight—

Mr. Kenneth Clarke: rose—

Mr. Cryer: Perhaps I may finish my sentence before the hon. Gentleman interrupts. People always seem to do so when I am speaking. Although this is a minor Bill it is greatly to be welcomed. It is very interesting that the first supplementary benefit disregard for single-parent families was set in 1966 at


£2, was not increased by the Tory Government in the early 1970s for some strange reason, although hon. Gentlemen opposite are full of pious concern tonight. and was increased by a Labour Government to £4 in 1975; and now we find a Labour Government again increasing the disregard to £6. Congratulations are certainly due to the Labour Government, although one has one's criticisms. At least they have done something which Opposition Members did not do when in office.

Mr. Kenneth Clarke: The benefit most relied upon by single-parent families is the family income supplement, produced by the last Conservative Government, now being used by this Government as its main source of support for one-parent families. This small disregard affects only the small number of one-parent families in part-time work.

Mr. Cryer: That is perfectly right, and I am not enthusiastic about it, either. I criticised it when it came in and I criticise it now. We want to reduce the number of means-tested benefits. This is slightly at odds with the assertion of the hon. Member for Woolwich, West (Mr. Bottomley) that we ought to stop State subsidies, because whatever their vices they at least do not involve means testing. They involve a general distribution of support through tax policy and back into the whole taxation system. If we take subsidies away and say that support should go to families who are directly in need, we have to select those families by some process—generally a means test—so we cannot have it both ways, which is what we are trying to do.
The Bill affects only 15,000 single-parent families, and it is a pity that the disregard could not have been further extended so that more families could be brought into its net. It is a pity that general maintenance allowance, considered to be fairer, could not have been invoked and accepted by the Government. It is a pity that the child benefit scheme, which we are to debate, could not have been introduced in April 1977, as originally envisaged, but the fact is that, day by day and week by week, we have the Opposition carrying out its scrutiny. That is what an Opposition are there for, and no one can blame them for doing so, but one can blame hon. Gentlemen opposite

for shedding crocodile tears on the position of single-parent families and then going to the Dispatch Box week after week and saying "The country is in an economic crisis. Why is the Chancellor of the Exchequer not cutting public expenditure?".
One has only to recall the devaluation of the pound. There was the Shadow Chancellor of the Exchequer rushing on to television and to every newspaper he could get hold of and saying "There must be a swingeing cut in public expenditure as an emergency measure". The Government have resisted that, but we cannot get away from the fact that we face an economic crisis of considerable proportions and that we have an enormous external debt. Facing this situation, the Government have said they are not deserting single-parent families and that they are going to make this small concession. They could go much further than this, because I do not think they have their priorities absolutely sorted out.
In my view we have to look at the whole span of public expenditure to see where we can cut back, so that we can channel more money into areas covering single-parent families and education.
The largest area that we can prune is defence, but, at the first mention of that, the Opposition go purple and come out with the hoary old tales of "Reds under the bed" and the readiness of the Russians to take us over. As a consequence, they say that we must spend more on defence. It is true that some of the less extremist elements in the Conservative Party do not take this attitude, and keep well below the parapet, but the Right-wing fringe wants us to spend more on defence.
I find it staggering that a party can exhibit such concern—much of it genuine—and at the same time exhibit explicit support for the mistaken decision of the Government to spend money on death-dealing weapons that are horrific in their magnitude.
We are talking about single-parent families able to earn a little more and still get their supplementary benefit to eke out a life that is not at the most lavish level and can never be imagined as such. We believe that these people, placed in an unfortunate position, need assistance,


because we do not accept the philosophy of the weakest going to the wall.
If that is contrasted with another element of Government expenditure supported by the Opposition, in which we devote people's brains and resources to the most effective ways of killing people, it simply does not stand up to examination. That is the sort of priority that the Government ought to look at, and they ought to tell the Secretary of State for Defence that he should not be so intransigent and obdurate, and that he should give a little, so that when the Chancellor of the Exchequer wants to cut our defence expenditure by £600 million or so, he should yield and say that we will get rid of that expenditure through planning—because that is a philosophy that we share.
We do not accept market forces; we plan ahead, and switch resources into areas of greater need, such as that of single-parent families. The proposed concession will cost £1·5 million. If we can save £600 million on defence, we get some idea of the scale of benefit that we could offer if only we got the priorities right. What is more, the priorities are not laid down on any tablet of stone; they are laid down by the Labour Party conference, which is the deciding factor in our achieving political application through Parliament.

Mr. Andrew Bowden: The hon. Gentleman referred to defence expenditure. Will he concede that the Soviet Union is spending a substantially higher proportion of its gross national product on defence than we are, and that we could do a great deal more to help one-parent families if we dropped nationalisation and all the costs involved in it?

Mr. Cryer: That is an interesting thought. I know that the Secretary of State for Defence has these amusing notions that the Russians are armed to the teeth. But anyone examining, for example, the NATO figures for central Europe will find that although it is true that we are inferior, given the total numbers of men under arms in the NATO Alliance and in the Warsaw Pact, NATO has substantially more. It is all bound up with definitions of people who are under arms—

Mr. Deputy Speaker: Order. I think that the defence debate can best take place on another day.

Mr. Cryer: I was merely drawing attention, Mr. Deputy Speaker, to the important level of priorities, and the hon. Member for Brighton, Kemptown (Mr. Bowden), with the Opposition's usual hysterical fervour, diverted the debate into this area. I did not want to stray into it, but it is an important point to make, nevertheless.
The other matter to which attention should be drawn is that these resources will be channelled towards working mothers and fathers. In Gingerbread meetings that I have attended, the point has been made that the mothers or fathers of single-parent families want to go out to work and do not want to be subjected to a means-tested benefit system which prevents their working or tends to inhibit their opportunity to work.
These proposals are a very useful step in the right direction. However, a brief sent out by the One-Parent Families Association points out that it really does involve the provision of more day care, so that the talents and abilities of one-parent families can be involved in work and productive resources. Hopefully, they will be involved in the provision and development of British manufacturing industry and not waste their resources on the massive amount of defence research and technology that we waste our resources on.
In my constituency of Keighley there is a very good and active Gingerbread group, which took over a closed commercial nursery. It ran an enormous risk, because here were people who were actually single-parent families themselves. By and large, the group did not consist of people who were better off; the members of the group were not in a financially strong situation, but they took over the nursery, which involved employing three people, because it was a full-time day nursery run in a local mill which had closed down.
The group obtained grants from a number of charitable organisations and redecorated the premises, and so forth. In fact, it considerably improved the standard of care that the premises had provided before. Yet it found that the local authority required higher standards in that


nursery than it had applied before, although it was, similarly, a professional nursery.
The members of the group found that the local authority wanted a much tighter ratio of trained adults to children. This was so oppressive that they almost reached the point where they had to abandon the project with debts around their necks—debts which, being genuine single-parent families living on supplementary benefit, they clearly could not afford. Those problems were resolved, but not without a great deal of heartache and anxiety. One recognises that we cannot introduce a massive amount of day care overnight, but the Minister should encourage local authorities to give every possible assistance to help groups and organisations which are prepared to venture into the sort of scheme I have outlined.
I await with interest the Minister's comments on this aspect, because sometimes I think that where people take over a situation like that and start to operate a

nursery system, there is a sort of inbuilt bureaucratic bias. It may be seen as an implicit criticism of the day-care facilities that we operate. That is not true, but it is a possibility. I appeal to the Minister to ask local authorities to give every possive encouragement to the provision of day-care facilities on a professional, semiprofessional or voluntary basis, in the absence of a massive amount of help to provide day-care facilities by the Government.
I hope that the Minister will agree that this Bill is very much to be welcomed. He must recognise that there are criticisms of the piecemeal approach, but he should also recognise that we support the Government because we believe their heart is in the right place. They must be inhibited at the moment from providing the comprehensive care which they would like to see, and it is only because of stark economic necessity that this is so. I am convinced that with a Labour Government in office we shall eventually see the sort of provisions we all believe are necessary for single-parent families and others.

10.14 p.m.

Mr. D. E. Thomas: I would add my welcome from the Plaid Cymru bench to what I must describe as a rather minuscule and pathetic piece of legislation. I choose my words carefully. I welcome the second part of the Bill in that it puts right an anomaly within the supplementary benefits system. But, of course, the reason why so many national insurance beneficiaries have to be dependent on supplementary benefits—and why this disregard provision is necessary—is that the general level of national insurance benefits is so low. This applies to the benefits introduced and upgraded by both the Labour Party and the Conservative Party. It is because the national insurance benefit threshold is so low compared with the poverty line that there is such a high dependence by all national insurance beneficiaries on supplementary benefits.
I will not follow the hon. Member for Keighley (Mr. Cryer) into the argument about defence expenditure, but at least I can defend increases in public expenditure because I have consistently voted against cuts in public expenditure and will continue to do so. With inflation, those on low incomes, particularly those facing multiple social deprivation, suffer most.

Mr. Cryer: I hope that the hon. Gentleman does not mind my reminding him that he voted against the defence review. I think that he would be happy to vote for cuts in defence expenditure.

Mr. Thomas: Indeed yes. I was referring to meaningful public expenditure on social policy. But I will not be drawn further into the defence argument.
With inflation, those on supplementary benefit, particularly those with multiple deprivation—for example, the housing problems of one-parent families—suffer most. So cuts in, or lack of spending on, both income maintenance and social policy programmes make the position of those people relatively worse within society. It has already been proved that the inflation rate for low-income families—one-parent families are overwhelmingly the majority in that category—can be as much as 4 per cent. above the general inflation rate.
In the references to rejection of the guaranteed maintenance allowance, we have heard no clear statement of alternative policies. I look forward to a clear statement of the alternative Conservative policy and its costing next week, as well as a statement of the public expenditure savings which are to be made in other areas to finance that policy.
Although the guaranteed maintenance allowance has been reduced, the reduction has been based on a false argument—that this would be yet another means-tested benefit. Yet neither major party is willing gradually to phase out existing means-tested benefits and to reduce in real terms dependence on supplementary benefits.
I do not want to anticipate a later debate—no doubt lasting all night—of the uprating but we have seen in real terms no reduction of the dependence on means-tested benefits. Indeed, it has substantially increased over the years.

Mr. Orme: Would the hon. Gentleman not acknowledge that the present Government are spending record amounts on national insurance benefits and, under the Order which is to come, on uprating short-term benefits to an unprecedented level which will offset the increase in inflation?

Mr. Thomas: I should like later to develop the point that in my view the proposed uprating will not meet the rise in inflation, particularly for people on supplementary benefit. Despite this Government's figures for their increased income maintenance programme, it has in fact been an attempt to take inflation into account—to make pensions inflation-proof, for example. But there has not been a transfer, in broad real terms, of resources into this area of social policy. I do not want to deal with the general social policy argument. Therefore, I shall restrict myself to the provisions of the Bill.
A number of recommendations—both short-term and immediate—to bring immediate relief to one-parent families were put forward in the Finer Report. I put down some parliamentary Questions on this matter earlier this year. We all mourn the absence of the Minister's predecessor from this debate and the area of general social policy. I asked the


Minister's predecessor what would be the cost at current prices of the supplement proposed in paragraph 5.254 of the Finer Report. The Minister said:
The current amount would be £2·50. The cost of introducing such a supplement would be of the order of £35 million and about 270,000 single parents would benefit".—[Official Report, 29th January 1976; Vol. 904, c. 334.]
Tonight we must consider the benefit for 14,000 single parents in the context of the 270,000 who might have benefited if we had found more money from the Government's overall expenditure.
In the same series of questions I asked about the cost of reducing the qualifying period for the long-term rate of supplementary benefit from two years to one year for lone parents. I was told that the cost would be about £6 million a year and that about 44,000 single parents would benefit.
I also asked what would be the current level of earnings disregard for those receiving supplementary benefit. I was told that it would be £4·76. I asked what would be the annual cost of increasing the earnings disregard for single parents to that level. I was told that the figure would be about £500,000. I asked what would be the cost of increasing the disregard to £8. I was told that the cost would be of the order of £2 milion.
If there were an additional disregard of £2, which would bring the figure in the Bill up to £8, an additional 14,000 claimants would benefit. By increasing the disregard further, at an additional cost of £2 million, we should be able to help twice as many one-parent families.
I stress those points as they arise from previous Questions on this issue. They confirm clearly what the Government are doing. Here I agree with what the Opposition spokesman said tonight. This measure is being introduced as a palliative, but minuscule, measure, and as a pretence for a social policy and a family income support strategy. It is being introduced to divert attention from the issue of, and the remedy for, family poverty.
The immediate introduction of some form of child endowment or child benefit scheme was a commitment in the Labour Party manifesto. Tonight we see a pathetic attempt to help a small number

of one-parent families. I regret that the Government are not prepared to find more money from their resources to help up to 170,000 one-parent families at a total cost of £35 million. It is in that context of what ought to be spent, of what is the real need, that we must look at this pathetic measure.

10.25 p.m.

Sir George Young: Perhaps I could start by placing on record the fact that there are at the moment four Members on the Government Benches and 11 Members on the Opposition Benches. This is a fair reflection of the interest in this Bill. The only Back-Bench Member on the Government side who listened to the Minister of State introduce the Bill was a Member representing a Northern Ireland constituency whose presence here—while we welcome it—was somewhat remarkable since under Clause 2 (2) we read that the Bill does not extend to Northern Ireland.

Mr. Orme: The hon. Gentleman would like me to put the record straight, I know. An Order in Council applying the provisions of the Bill to Northern Ireland will be produced which will have the same starting date in Northern Ireland as the Bill will have in the rest of the United Kingdom.

Sir George Young: I am grateful to the right hon. Gentleman for the clarification. If he reads Clause 2 (2) he will see the statement I have made. In his introductory remarks he did not make that important qualification.

Mr. Cryer: rose—

Sir George Young: No, I will not give way. The hon. Gentleman was not present at the beginning of the debate.

Mr. Cryer: rose—

Sir George Young: Very well.

Mr. Cryer: Will the hon. Gentleman accept that while it is all very well making criticisms about the absence of Members from the Chamber, the technique of the Opposition over the past few weeks has been to keep a handful of their Members here knowing full well that the Government, to safeguard their position, have had to keep between 200 and 280 Mem-


bers present night after night? The Parliamentary Labour Party did not—

Mr. Deputy Speaker (Mr. Sydney Irving): Order. I do not believe that those remarks have any bearing on what we are debating.

Sir George Young: I am grateful to you, Mr. Deputy Speaker. I do not want to be side-tracked. I hope to make a brief contribution because I would like to catch your eye of Monday and I am aware that the length of one's contributions is taken down and sometimes used in evidence against one.
It would be churlish not to welcome the Bill, particularly Clause 1 (1). It is, however, important to try to put the Bill into some sort of perspective and to ask whether it represents a section of a coherent and well-thought-out strategy to deal with the problems facing single-parent families as described in the Finer Report or whether it is a one-off and rather desperate attempt to try to keep quiet a well-organised pressure group.
I quote the former Secretary of State for Social Services, the right hon. Member for Blackburn (Mrs. Castle), to shed some light on this basic issue of how the Bill fits into the Government's strategy. When the Finer Report was published on 2nd July 1974 the right hon. Lady said:
I can now say that the Government accept in principle that additional support should be provided for one-parent families although I cannot accept commitment to the particular recommendation made by the committee. The committee's proposal for a new social security benefit comes at a time when the Government are preparing their promised scheme to help the low paid and other families in poverty by introducing child cash allowances for every child, including the first, payable normally to the mother. We shall therefore consider most carefully in the light of the report the appropriate form and scale of provision for one-parent families in relation to the broader system of family endowment as it is developed."—[Official Report, 2nd July 1974; Vol. 876, c. 92.]
The broader system of family endowment has since been abandoned. That means that there is a gaping hole in the Government's policy towards single-parent families. In no way does this modest measure before us fill that large hole.
The Bill raises many more questions than it answers. What is to happen to

the suggestion that the waiting period before single-parent families are eligible for long-term benefit should be reduced? What about the other suggestions, such as that there should be a supplement for single-parent families? Are all these other recommendations to be permanently dropped and is this all that single-parent families are to get for the next three or four years? These are the basic questions raised by the Bill. The Bill is indeed an inadequate response to the issues raised by Finer.
If we read what the right hon. Member for Blackburn said at a conference in Caxton Hall on 21st February of last year it will be seen that she made it clear that the child benefit scheme was to be the Government's main vehicle for helping single-parent families. Now that that scheme has been abandoned, or postponed, what do the Government intend to do in the meantime to help single-parent families?
Inevitably reforms of this nature give rise to anomalies. My hon. Friend the Member for Rushcliffe (Mr. Clarke) touched on some of them. One anomaly immediately springs to mind. If there should be a reconciliation and an unemployed husband returns to the home of a wife and mother who is earning, the moment he returns the disregards for the wife's earnings drop from £6 to £4. There is no point whatever in a wife earning more than £4 a week should the husband return, so there is a disincentive here—either to reconciliation or to work. Whichever it is, it is most unfortunate.
Another anomaly is that there are certain other sections of the community who are faced with serious problems. They are not single-parent families, and their disregard remains at £4. This poses the question whether their problems are not so severe that they, too, should be included. However, I am prepared to accept this anomaly as a short-term solution in the interests of single-parent families.
Many of my hon. Friends may not agree with me, but I believe in the guaranteed maintenance allowance, which is perfectly consistent with Conservative philosophy. I see this as an interim solution. Perhaps the Government could give us an idea when they will fill in the gap left in their strategy for single-parent families.
An undesirable facet of the Bill is the sharp cut-off at £6. I am in favour of a tapered disregard, where there is not an immediate pound-for-pound cut-off at £6. I would be happier with a sliding scale where a single parent family could keep 50p of the extra pound over £6, rather than being subject to what is, in effect, 100 per cent. income tax.
Connoisseurs of the subject will remember that in 1975—a vintage year for social security legislation—we debated these issues in Committee. I recall Amendment No. 59 in the Committee Stage of the Social Security Benefits Bill. It was a provocative little amendment, which encouraged the Government to adopt a tapered disregard. The Minister who replied to that debate, said:
However, I take the point about the sliding scale."—[Official Report. Standing Committee B, 16th January 1975; c. 392.]
He promised to keep these matters under constant review.
The Government could, with advantage, have introduced a sliding scale on this occasion to see how it worked. No objection to it was raised in principle in Committee. If there were a sliding scale for disregards it would be much fairer for single-parent families, as it would reduce the disincentive caused by the sharp cut off.
The frequency with which disregards are reviewed is another matter which causes concern. It seems strange that we need legislation to change the level of disregards but are able to change the rate of benefit by Order. This is another anomaly. The level of disregards was set in 1947, and not reviewed until 1966. This level remained in force until 1975. One could say we have disregarded the disregards, and that the value of disregards has been eroded by inflation but that we in this House never paid any attention to it.
Clause 1(2) has not attracted much attention, yet it is a provision which contains bad news. I expect that the Government had hoped that no-one would notice it because the good news contained in the Bill for single-parent families would overshadow it. This provision is not concerned solely with single-parent families going out to work but with depriving widows, whether they work or not, of part of their supplementary benefit. The Government introduced

it rather quietly and they covered their tracks rather well. The Long Title of the Bill is to
amend paragraph 23 of Schedule 2 to the Supplementary Benefit Act 1966",
yet when I went to the Library and asked for this legislation I was told that it did not exist. The true name of it is the Ministry of Social Security Act 1966.
We are then told in Clause 2 that that Act is to be amended in paragraph 24 of that schedule, and we are invited to insert various words after the word "except". I looked for it in paragraph 24(3), and the one word that does not exist is the word "except". One has to go to the Social Security Benefit Act 1975, which amends the 1966 Act, to find out what is going on. In the Social Security Benefit Act one finds sub-paragraph (3), which was closely related to the Social Security Act 1973 and which is not mentioned anywhere in the Bill. There is a new sub-paragraph (3) which has the word "except" in it. We wonder why no one comes to our social security debates. The answer is that it is so difficult to find out what the Government are doing because legislation is scattered so widely.
The Minister of State said in introducing the Bill that it would simplify things. I hope so. If at some point we could consolidate all social security legislation we would never make it intelligible but at least we could put all the unintelligible aspects in one document, and that would make life easier for those of us who try to follow these matters.
The Minister did not say why we should have this amendment now. We went over this ground thoroughly in 1975. We debated Schedule 3 of the 1975 Act when this disregard was put into the legislation. The Government had the opportunity then to say that it was inconsistent with other social security legislation, but they did not. Now the new Bill is brought forward but we are not told what has happened in the last 15 months to make it so important to deal now with a matter which was overlooked in the major review only 15 months ago.
My hon. Friend the Member for Rushcliffe referred to the 13-week rule. It can be a bit harsh. There is an exemption for those in hospital, but there are equally deserving cases which do not


involve hospitalisation where it would be wrong to deny people their preserved rights. No doubt my hon. Friend will deal with that aspect in Committee.
I do not like Clause 1(2) and I did not find the Minister of State's reasons for it very convincing, bearing in mind that no mention was made of the apparent glaring anomaly only a year ago. But I look forward to the Government explaining at some point what they will be doing about the Finer Report and what help they will be giving single-parent families because those families will get very little help from this Bill.

10.39 p.m.

Mrs. Lynda Chalker: I apologise for not having been here when the Minister of State began his speech, but I had sat through two-and-a-half hours of the Development Land Tax Bill, and even those of us on diets need sustenance.
No one regrets the introduction of the Bill, only its limited scope. We could rehearse arguments in favour of one sort of cut or another in the Government's spending programme. Each different cut would be supported by one of the different groups within the House, each believing that it was correct. But no proposal will leave the single-parent family any better off until we stop the fall in the value of benefits which these families are already receiving. That must be the Government's top priority.
One of the major considerations for me in trying to assist one-parent families has always been to allow these people a continued contact with the outside world, perhaps away from their children, in order to live the more normal life they experienced either in marriage or in some other relationship before they had to assume sole charge of children.
One of the ways in which this sort of outside contact is most successfully maintained is through the work place. I do not doubt that the increased number of younger men and women who have had to seek help from their doctors because of frustration and severe depression through dealing with children and trying to make ends meet could be much alleviated if they could take at least a worthwhile part-time job. This aspect

of the disregard legislation worries me more than any other.
There is also the question of self-respect. Anyone who has lost a partner in or out of marriage has a great climb back to establish his or her position in society, particularly if there are dependent children. Another means of doing this is through contact at work with those in the normal nuclear family or others with similar experience of the single parent's unhappy circumstances.
That is why I would always put encouragement to work for one or two-parent families above the indiscriminate handing out of benefits which we see in many areas of social policy. We do not yet have a sufficiently accurate way of giving to those who are really in need and encouraging those who would benefit from going to work to do so.
Before anybody gets the idea that I advocate the abandonment of small children to an outside person while mothers go back to work, I should stress that for the first few years a mother should be more tied to children but that when they go to school, it is necessary for single parents—mothers or fathers—to go back to work. Perhaps this is even more important for the 80,000 single-parent fathers to help them to regain their self-respect. My hon. Friends have spoken about the importance of pre-school playgroups and the tremendous work done by their association. We hope that that will continue, and we welcome the increased grant to that organisation.
There was, for once, something in what the hon. Member for Keighley (Mr. Cryer) said when he referred to the need for greater flexibility by local authorities to ensure that the facilities in pre-school playgroups and day care continue in order to help single parents who work and also to allow them to get the benefit of the disregard, which has been increased for the second time in the past year.
I hope that the Minister will discuss with the Minister of Education the situation facing single parents who wish to undertake training in order to get back to work. Those who have been given money to go on courses—such as the TOPS courses—to fit themselves for work in the longer term, have lost the benefit of the disregard. This has been one of the problems of the increased training


opportunities provided by successive Governments, and it needs to be rectified.
We must remember that there are about 80,000 new single-parent families every year. No one has fully calculated the burdens which will be imposed if we do not move to the system advocated by my hon. Friend the Member for Ealing, Acton (Sir G. Young). We need to increase the disregard and, above that new level, gradually lessen the amount lost by a person at work. We must also consider the situation faced by a woman going through a separation or divorce or a change in her financial circumstances due to becoming a single parent. Many wives who lose a husband's income find themselves thrown back on to the State. The disregard hardly applies to them. They tend to lose out badly anyway. A tax credit system for single-parent families and other groups in need of Government support would help to overcome many of these problems.
The inflexibility of our social security system means that we are unlikely to achieve that happy state where those in need receive the benefits that are available and those who do not need them do not get them. Such a system would avoid the wastefulness of one Government Department paying out and another clawing back.
All my hon. Friends—or all those on the Back Benches—know the benefit that a guaranteed minimum income would bring, especially to single-parent families. If the Government can see their way through the earnings disregard by a gradual increase, worked in with the social security benefits and supplementary benefits received by the one-parent family so that the benefits given by the Government become a topping-up procedure, we shall be working towards one of the Finer recommendations.
A whole host of work has to be done, but as long as we continue having one small piece of legislation after another we shall make the eventual sorting out of benefits and earnings incredibly more complex. The late Member for Rotherham, Brian O'Malley, responded happily to me in Committee on some social security Bill when I expressed the wish that we should move not merely to solidation but towards a simplification of the whole system. Although the Government are introducing a welcome measure, it is

merely a drop in the ocean. There is no sign that we are working towards a system which is more easily computed, which more easily provides for those in true need, and which benefits those who could be encouraged to work by removing some of the many tax and disregard disincentives.
I hope that the Government will make an increased effort to think about the problems that face the 80,000 single-parent fathers. That group, above all, needs more support—perhaps even more than single-parent mothers. The fathers cannot always undertake as many of the tasks that a woman can carry out for small children. That is another area where the Government, for all their good works, have not sought clearly to put forward their point of view in the debates that we have had over the past two and a half years. I look forward to hearing it.
I have not strayed into the business for next week, although there is a great deal more that can be said about earnings and disregards. I merely say that we shall do better by encouraging individuals to work and to care for themselves. We shall do better by ensuring that they receive the right remuneration, rather than creating disincentives, and the right to lead an individual life, whatever the individual circumstances.

10.49 p.m.

Miss Jo Richardson: A number of comments have been made by Opposition Members about the few Government Members present this evening. There have been a number of Government Members around the House this evening. They were waiting with anticipation for this debate, but they have been put out by the changes of business which seem to occur with great rapidity. If one leaves the Chamber for a few minutes one finds that the business has changed.

Mrs. Chalker: If we had not had a move at around the hour of midnight last night, the amendments to the Development Land Tax Bill could have been dealt with through the night and we could have commenced this business at 7 o'clock this evening.

Miss Richardson: I am grateful for the hon. Lady's intervention. I was quite happy to stay all night. I had brought a change of clothing with a view to doing


so. I understood that an agreement had been reached between the Government and the Opposition. I was rather surprised, therefore, when I opened my newspaper this morning, to find that some row had apparently taken place after I had left. But that has nothing to do with one-parent families. All I am saying is that many Labour Members are very conscious of the problems that are heaped upon one-parent and other deprived families and that they would have wanted to take part in the debate if it had not started quite so late.
I add in passing that, having been here for the last few nights—as perhaps all those present in the Chamber have been—I find it rather curious that the number of Labour Members could be counted in hundreds while the number of Opposition Members, in some Divisions, could be counted only in dozens. It ill becomes Opposition Members to talk about who is present and who is not.
However, let us return to the Bill. I very much welcome the Bill, and the uprating Orders which are to come later tonight. I should like to do so with wild enthusiasm. I do not do so with wild enthusiasm because in my view—other hon. Members have spoken on this theme—it is a drop in the ocean when one considers the difficulties that face the people about whom we are talking. Nevertheless, I think that all of us will know one-parent families to whom this extra disregard will be of enormous benefit. This is one of the problems that face all hon. Members. We have probably more constituency correspondence from one-parent families and others who are doing a part-time job, and so on, than correspondence on any other problem. Therefore, the Bill will be helpful.
The hon. Member for Wallasey (Mrs. Chalker) talked about heads of one-parent families of either sex. I entirely agree with her. The men who are the heads of one-parent families, particularly those looking after a number of smaller children, are in special difficulties. Their problems should not be underrated. One came to see me at my surgery only last week. He has a particular difficulty concerning his mother, whom he has to bring from several miles away each day to look after the children and who must be there

when they return from school. She is unable to get accommodation near him. There is this perpetual difficulty. It is more of a difficulty for men in some respects, perhaps because women have become more used to managing.
Nevertheless, in spite of the welcome for the Bill, I believe that one-parent families would have preferred to see the Government introduce a guaranteed maintenance allowance for one-parent families. That was one of the recommendations of the Finer Report. I hope that the Minister will refer to that point. That would be a much more satisfactory way of dealing with the matter.
I want to comment on the operation of the cohabitation rule. Although it is not specifically a matter for the Bill, it comes into view when one considers Clause 1(2), to which the hon. Member for Ealing, Acton (Sir G. Young) has referred. The discontinuance of disregards for the children's allowance attached to widow's benefit, industrial death benefit, and so on, leads my thoughts always to the cohabitation rule. I hope that the Minister will comment on that—although he looked slightly askance when I said that. However, when one mentions widows and one-parent families, one inevitably thinks of the difficulties that face such families in regard to the operation of this rule.
I confess that I had hoped that with the publication of the report of the Supplementary Benefits Commission "Living Together as Man and Wife", there would have been a marked improvement—and I mean a "marked" improvement. Although the recommendations were limited, they were welcome. I would prefer the abolition of the cohabitation rule but, even within the limits of the report, I hoped that its instructions would have had a more marked effect.
In my constituency I have sympathetic and helpful social security and supplementary benefits office, but I am distressed by cases in other areas of widows and one-parent families who still feel disadvantaged and subjected to over-scrutiny by investigating officers. I hope that before long there will be more officers in training and more money to spare for their training, to enable the rule—while we have it—to be operated in a more humane manner. But I shall


still go on flogging away for the abolition of the rule.
My real complaint is that the Bill is piecemeal rather than a real attack on poverty in a planned and careful manner. We operate benefits, increase the disregard—and that is welcome, but it adds to the complexity of the social security and supplementary benefits provisions. I wonder how ordinary folk, who are earning their living and looking after their families, can understand all the regulations. When I go to my surgeries I take with me the supplementary benefits handbook plus the explanation of it by the Child Poverty Action Group. Even 1. au fait as I am supposed to be with the subject, need that explanation. We should be thinking of ways of reducing the number of provisions that apply to one section of the community but not to another.
I hope that the Government are working towards a real attack on poverty. Although I know and welcome the record of some Opposition hon. Members on social problems, I find it difficult to accept the crocodile tears shed by the official Opposition about poverty and one-parent families. They are always talking about public expenditure cuts but they never talk of cutting expenditure on defence, as my hon. Friend the Member for Keighley (Mr. Cryer) said. They do not talk of the poverty involved in the hospital waiting lists. The theme of the Opposition in the Committee on the Health Services Bill centres round the better-off section of the community who can afford to pay for a bed, rather than on those who cannot afford private treatment. I cannot think of a one-parent family in my constituency which could afford to go to a doctor privately or take a private bed in hospital. I find it ironic that the Opposition should talk of their concern for the poorest in the community yet still mount an attack on the Government's policy to phase out pay beds.

Mr. Patrick Jenkin: Is the hon. Lady saying that she thinks that no widows with children are members of BUPA or PPP? When my mother was widowed when I was a boy she was a member of BUPA.

Miss Richardson: I did not say that. I said that I did not know of one-parent

families or widows who were members of BUPA. The right hon. Gentleman may, but the great generality of the people about whom we are talking, whose earnings will be disregarded by a further £2, are not the kind of people whom we are discussing in the Standing Committee on the Health Services Bill, where the Opposition speak of protecting the interests of those who want to take advantage of private practice. I find it difficult to relate what Conservative Members say about people in the category affected by this Bill to what we are talking about in the Committee on the Health Services Bill.
One-parent families, and those who will benefit by the upratings to which we shall come, welcome these extra provisions, but they would join in and appeal to the Government to think ahead for five or 10 years—we know that it is not possible to do it now—and to reduce the complexities so as to show the country that we have not a piecemeal, tactical approach of helping here and there but a strategic attack on a poverty that still exists.

11.2 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): We have had an interesting and wide-ranging debate, particularly in view of Mr. Speaker's ruling. But we did not discuss child benefit because that awaits a perhaps more important and probably more controversial occasion on Monday.
I should like to reply to the individual points raised by hon. Members and then deal with the more general points—Finer, our policy towards one-parent families and so on—and try to give a reasonable ending to what was a stimulating debate, even if it was not all directly relevant to the subject of this small Bill.
The hon. Member for Rushcliffe (Mr. Clarke) gave a cautious welcome to the Bill. He accused us of offering it merely as a sop to single-parent families. He seemed to be casting around for something controversial to say. I do not think that the way in which the Opposition Front Bench has received the Bill will go unnoticed. I am glad to say that that slight churlishness of approach was not echoed by some Conservative Back-Bench speakers. I suppose that the bad grace


and degree of sourness shown by the Opposition Front Bench are to be understood only in the light of its appalling record from 1970 to 1974. But I do not want to become controversial.
I hope that I can now proceed, without entering into the party politics which have dominated some of the speeches, to answer the detailed points on the Bill and on family support which have been asked by all hon. Members who have taken part. By their presence tonight and on previous occasions, they have all shown their support for the attack on family poverty. Whatever may be thought of the Government's measures, there is a great deal of good will in all parts of the House for what is being done and, more important, for what still needs to be done.
The hon. Member for Rushcliffe mentioned the cohabitation rule, and staff training. My hon. Friend the Member for Barking (Miss Richardson) also mentioned the cohabitation rule. It is certainly generally agreed that any benefits relating specifically to one-parent families must be subject to a cohabitation rule. That is common ground between the major parties.
The Supplementary Benefits Commission has proposed in its recent report, "Living Together As Man and Wife", certain changes in the administration of the rule. This depends very much on the recruitment and training of specially selected staff. I cannot say when these changes can be implemented, but I assure the hon. Gentleman there will be no unnecessary delay. We are aware that this is a contentious issue, which can be clarified to the satisfaction of most people who have had strong views about this issue only when we have these trained staff in operation.
The hon. Gentleman mentioned that the disregard had hardly kept pace with inflation and yet at the same time he also wants to see the disregard figure—as does the hon. Member for Woolwich, West (Mr. Bottomley)—even bigger. But, as the hon. Gentleman himself pointed out, once we start increasing these disregards specifically for one-parent families, we are then distinguishing the one-parent family in this particular respect from all other supplementary benefit beneficiaries, and there may be some equally worthy and deserving cases for special earnings disregards.
We do not want to make the supplementary benefit scheme any more complicated than it is at the moment. There is probably all-party agreement that we want to try to get owards simplicity, but at the very least we want to alleviate many of the complexities of the scheme which makes it so difficult for people to understand, particularly—and most importantly—the users of the service.

Mr. Kenneth Clarke: Will the Minister confirm that it is his intention that this should be a temporary distinction made for single-parent families with disregards until such time as the House agrees something more satisfactory for single-parent families in general, and that it will then be the intention to go back to having one level of disregard for all supplementary benefit claimants?

Mr. Deakins: I shall come to that in my more general remarks. I assure the hon. Gentleman that I shall not miss that point.
The hon. Gentleman the Member for Belfast, West (Mr. Fitt) referred to a lack of Conservative commitment on public expenditure. Although I do not think he actually accused the Opposition of being hypocritical, he said that it is one thing to propose enormous cuts in public expenditure and another to suggest that every step the Government take, in a very modest way, to increase public expenditure in a very limited area of social policy ought to be doubled or tripled and that there ought to be a lot more money forthcoming. We have to bear in mind the economic situation generally when we are considering general support, but I shall come back to that point later.
The hon. Member for Woolwich, West has apologised to me and to the House for having to leave. He made a number of very interesting points. I did not agree with them all. Fortunately, he gave me some fair warning by going on the "Today" programme this morning, so that I was appraised of the burden of his remarks here this evening.
I shall not go into the hon. Gentleman's remarks about food subsidies. That would take this present debate rather wide of the mark. I think I can safely leave defence of the Government's policy on food subsidies to my ministerial colleagues in the Department of Prices and Consumer Protection. Equally, on the


subject of school meals, the hon. Gentleman suggested a redistribution in that area of expenditure to the poor. However, I do not think that would be the type of redistribution that would be welcomed by Labour Members, or indeed by some Opposition Members.
The hon. Gentleman also asked me a specific question about casual earnings. He made the point that heads of one-parent families may earn a small amount one week and receive disregard, earn nothing the following week, and so on. He asked whether the system could be averaged out because he felt that such families would be badly hit. I assure the House that for supplementary benefit purposes earnings are usually taken into account week by week. That is the general system at present. But where this is impracticable because earnings are received at irregular intervals, they can be averaged over a period. It may be that there is scope for the exercising of more discretion by the Supplementary Benefits Commission, but it would take us into areas other than those covered by this debate. Judging by a recent speech made by the chairman of the commission, it would appear that he would rather that the area for discretion were reduced, and I would go along with that.

Mr. Patrick Jenkin: Since the Minister has mentioned Professor Donnison, it is only right to put on record the number of speeches he has made and articles he has written. They have provided valuable background material for our debates on these matters. I refer particularly to the Seth Memorial Lecture given by Professor Donnison earlier this year, which was a most valuable contribution to thinking of this subject.

Mr. Deakins: I am grateful to the right hon. Gentleman for making that point, which I wish to endorse. This is certainly a suitable opportunity to express appreciation of the work carried out by Professor Donnison. I am sure that that work will be continued in the annual report of the commission to be published later this year.
I turn to the remarks of my hon. Friend the Member for Keighley (Mr. Cryer), who gave a wholehearted welcome to the Bill. He mentioned guaranteed mainten-

ance allowance, which I shall mention later in my remarks.
My hon. Friend referred to the hypocrisy of the Conservatives—he did not actually use that word, but that was what he implied. I do not necessarily think that is fair to the Opposition. I would rather use the word "schizophrenic" as applied to their activities in respect of public expenditure. On the one hand, they call for wholesale across-the-board cuts in public expenditure and, on the other hand, they call for wholesale increases in various aspects of public policy. I shall go no further along that road now, because it is entering too much into controversial areas.
My hon. Friend underlined the need for more day-care facilities for one-parent families, and the hon. Member for Wallasey (Mrs. Chalker) also took up that point. She wanted to see more heads of single-parent families out at work and thought that this Bill would be valuable in achieving that end. I recognise that the provision of day-care facilities is a stumbling-block in this respect. The situation at present is that virtually all local authorities now regard young children of single parents as having priority in day-care provision.
The basic problem is still that of resources. It has not yet been possible to meet the needs of all priority classes. Further progress depends on manpower—or perhaps I should say "people-power"—being available and also on the provision of financial resources. Obviously, resources in the immediate future will be limited. Therefore, it is not possible to give a commitment on a timetable to meet the day-care needs of one-parent families.
In some other countries—not all Communist countries, incidentally—many industrialists find it to their advantage in recruiting and retaining good workers, particularly women workers to provide day nursery and care facilities at factories and offices. Although I accept that this would be an additional burden on employers, who are facing problems like the rest of the community, I hope that we shall not get a position where we regard local authority day care provision as being the complete answer to the problem of the single-parent or two-parent


families where those parents have to go out to work.

Mr. Cryer: In my remarks, I mentioned the attitude of local authorities towards Gingerbread groups and other organisations which take over the running of nursery schools themselves, and I asked him to encourage local authorities to give every assistance in their power. Will my hon. Friend reply to that?

Mr. Deakins: It is not our direct responsibility in the Department, of course, but we shall do our best to push this along. However, we have to bear in mind that in the present public expenditure climate it will be very difficult, if not impossible, to ask local authorities to take on further financial commitments.
I come next to the speech of the hon. Member for Merioneth (Mr. Thomas), who called the Bill a pathetic one and gave it a rather half-hearted welcome. He mentioned the guaranteed maintenance allowance, which I shall be coming to later. He said that he would like to see the phasing out of means-tested benefits. Who would not? It is probably generally accepted that we should be moving away from means-tested benefits as far as possible towards benefits as of right, especially where they can be geared to the needs of the classes of individuals who require them.
The hon. Member for Merioneth also asked about the Finer recommendation for a supplement to supplementary benefits for one-parent families and the cost. He gave some figures of the cost which I think he got from a parliamentary Answer. I shall deal with the principle of that later when I discuss some of the Finer recommendations.
The hon. Member also mentioned the £8 disregard. Why not £8? Why not £10? Once it is felt that one can go beyond what the Government propose, there is no reason in logic for stopping at any particular sum.
The hon. Member was rather grudging in regarding the Bill as a diversionary tactic. He underrates himself and the House generally if he thinks that any Government could get away with a Bill of this kind and regard it as a diversionary tactic. The Bill is good in itself, and it stands up in its own right. The

fact that it may not be related to anything else need not worry us. What the hon. Gentleman fears is that this is all that is being done or all that will be done for one parent-families.
The hon. Member for Ealing, Acton (Sir G. Young) gave a positive welcome to the Bill, but he asked a more general question about Government support for one-parent families. I shall come to that in a moment. He asked about the Finer recommendations, which I shall deal with presently. He made an interesting point about the one-parent family where the other partner returns—in other words, there has not been a death or a divorce, but just a separation—and the loss of disregards. I am afraid that that, inevitably, will be the case. But what has happened in those circumstances is that the one-parent family has become a two-parent family, and it has to be considered in the light of the concessions being given through the social security system to two-parent families. Certainly nothing that we are proposing will make reconciliation more difficult. I believe that that is a matter for the individuals themselves.
The hon. Member also asked about a sliding scale. That idea was also mentioned by the hon. Member for Wallasey. There is an objection to the idea of a sliding scale. It would introduce yet another complication into the supplementary benefit scheme. Certainly it would make it more difficult for the staff to operate it. Even more important, it would be more difficult for claimants to understand it. I am informed that it was tried between 1959 and 1966, when the supplementary benefit earnings disregard was £1 10s. plus half of the next £1. That became complicated, and the succeeding flat rate of £2 disregard was introduced as a positive simplification of the scheme.
The hon. Member also made a valid point when he said that disregards were not uprated often enough. Well, they were not uprated at all when his own Government were in office. We have at least uprated the disregards for the second year running. That is not to say that we shall necessarily uprate on a 12-month basis, like other social security benefits. But I take the point that this is one means of helping one-parent families who wish to go out and help


themselves and not depend on supplementary benefit. It is a matter to which we shall have to have regard in the future.
The hon. Member for Ealing, Acton was one of the few hon. Members, perhaps the only one, who spoke about the ending of the widow's child allowance disregard. He asked why it was not done a year ago. I will answer that point in my more general remarks.
I have many general points to make. I am in the happy position of answering the debate and I hope that I shall be able successfully to answer every single point raised in it. In addition, I am not under any pressure of time nor, indeed, is the House and I can take a thorough look at what has been said.
The hon. Gentleman's last point was about consolidation. I did not know of this. I have just been handed a copy of the Supplementary Benefits Bill [Lords], which is a consolidation Bill, on supplementary benefits. At least it is a start, although I appreciate that there is an awfully long way to go. The trouble with our social security structure is that it is like a building in which the cement is never dry and it is never at a proper stage for an opening ceremony. But I take the point.
The hon. Lady the Member for Wallasey made an important point about wanting to see more one-parent families going out and getting jobs. In a modest way this measure will help in that regard. She then referred to the training of single parents who wanted to go back to work, or even to start work for the first time. Although it is not directly relevant, my Department will be willing to look into this with the other Departments involved, presumably mainly the Department of Employment, to see whether any other measures are needed and what can be done within the general context of industrial retraining.
The hon. Lady also mentioned the complication of the whole system of benefits, earnings and taxation. I must admit, as someone who would love to see simplication, that I have great sympathy with her. With all the social security legislation over the past few years, perhaps next year—I am touching wood when I say this—there might be a breathing space in which we can digest the legis-

lation which has gone through this House and then look at the relationship between different parts of the social security system, the taxation system and earnings. We could also consider whether there should be a minimum wage, equal pay and so on, to see whether we could tie them up more closely than they are tied up at the moment. This is where the notorious poverty trap stems from and also the disincentive for some people on supplementary benefit to go back to work.
Having dealt with the individual points, may I come to the more general themes of the debate? I am not sure whether hon. Members have been waiting with bated breadth. I will start with the implementation of the Finer Report. I shall not go into those recommendations which the Government have implemented because I take it that they go almost without saying and are accepted by both sides of the House.
I think that the hon. Member for Woolwich, West said that many recommendations had not been implemented. I think he was quoting from the leaflet, or letter, sent round by the National Council for One-Parent Families which listed what we had accepted, what we had rejected, what was still under consideration and what was in limbo. The figures in that document are quite correct but, at the same time, they are a little misleading.
Many of the recommendations which have not been implemented are concerned with points of detail and the implementation of major concepts. For example, 54 recommendations deal with the guaranteed maintenance allowance and the associated proposals for the recovery of maintenance. Hence, 54 recommendations have been rejected because the Government did not legislate on the recommendation for a guaranteed maintenance allowance.
Twenty-six recommendations deal with the recommendation for family courts, which the Government have been unable to accept because of the demands which the implementation of this proposal would make on new accommodation and trained manpower. There were also recommendations about social services which, although generally in line with the Government's own views, are mainly for implementation by local authorities, and further progress here depends very much on local authorities' own priorities


and the availability of manpower and financial resources.
Many hon. Members mentioned two specific recommendations. The first was Recommendation 118:
Lone parents should be entitled to a special addition of £1£50, in terms of 1972–73 benefit rates, and whichever single person rate they would otherwise receive.
The Finer Committee recognised that the major expenses of one-parent families were difficult to quantify and that the need for them varied from household to household. As it has not been shown that all one-parent families have consistent and measurably greater needs than two-parent families on supplementary benefit, the Government consider that special individual needs should continue to be met through the existing discretionary powers of the Supplementary Benefits Commission. The cost of this special addition at the rate of £2£50 would be about £35 million.
The second recommendation which has been specifically mentioned is Recommendation 120, that the qualifying period for the long-term addition should be reduced from two years to one for families with children. The Government did not feel able to consider the position of one-parent families separately from that of other groups who qualify for the longer-term rates after two years but they will consider reducing the qualifying period for all the groups as resources permit.
There is one other Finer recommendation that I should mention. That is Recommendation 125, the easement of the full-time work qualification for one-parent families in the family income supplement scheme. This is under consideration at present and has not been accepted or rejected. But at least there is a possibility that something could be done about it.
I now turn to the main Finer proposal, for a guaranteed maintenance allowance. The hon. Member for Rushcliffe said that the Opposition on the whole supported the Government's view about this allowance. I think that some of his hon. Friends and some of mine still feel that, although the two Front Benches may be in accord on this, there is still a strong case for some form of guaranteed maintenance allowance.
The Government have rejected this allowance, first of all because it would be means-tested. Second, it would be expensive in manpower. We reckon that about 8,000 more civil servants would be required to administer the allowance and the associated full scheme of administrative orders, which would cost £250 milion a year net of savings on supplementary benefit and family income supplement and recovery from liable relatives. If there were no means test the cost would be about £400 million a year. In the present economic climate, when the Government have to contain public expenditure, we just cannot afford to introduce a new benefit on that scale.
I now turn to more general policies of support for one-parent families, the theme running through this debate. There has been no dispute that more needs to be done. One could say that, of course, about a number of other social security benefits as well, but our debate tonight is about one-parent families.
Of course the Bill helps one-parent families, despite some of the carping criticisms which have been made. It fulfils one of the major recommendations of the Finer Committee. But apart from that, the Government have taken other measures, recommended both by Finer and by others, to assist one-parent families. After all, we increased family allowances in 1975. They were not increased during the period 1970–74. A substantial improvement has been made in the tax position of one-parent families through an increase in the additional personal allowances which heads of those families can claim.
Easements have also been made in the supplementary benefit scheme, on which so many lone parents depend. I shall list them. Young mothers under 18 who are not householders now get the full adult non-householder's scale allowance. Lone fathers are no longer required to register for work. Children's part-time earnings are ignored in subsequent assessments. Supplementary and widows' benefits have been increased periodically and will be uprated a fourth time next November, when rent and rate rebates will be improved again. In July the family income supplement, which is of particularly importance to one-parent families, will be raised for the third time since we took office. One-parent families have been the


first to receive cash support through the child interim benefit introduced in the Bill. When child benefit comes into force next year those families will be paid an extra 50p on top of the £1 for the first child, so that they will continue to enjoy the benefit that they now receive by way of interim benefit.
The total cost of the measures introduced up to now by the Government amount so £150 million, which is £25 million more than was necessary to offset the effects of inflation. There has been a real increase in the value of social security benefits for one-parent families. One-parent families will benefit from the forthcoming unratings which are the subject of our next debate.

Sir George Young: The Minister promised to explain why Clause 1(2) was being amended, and why it was not amended in the 1975 Act.

Mr. Deakins: Clause 1(2) of the previous legislation was not amended in the 1975 Act. Nor was the anomaly amended at any time in the 1960s and the 1970s. When major pieces of legislation occurred under previous Labour Governments it was felt that the time was too short and that an anomaly had been introduced to remedy what was thought to be an unjust situation at a time when the national assistance scheme was changed. As a result no action was taken. Perhaps both parties have delayed too long in putting right this anomaly. Nevertheless I think that we may do so now, justifiably, especially as we are protecting the position of those who benefit from this anomaly at present.
I know that the hon. Gentleman has one or two points which we may consider in Committee. However, I do not think that this is a blot on the Government's copybook by any means. Any Government would have needed to simplify the scheme of disregards, especially when the original reason for introducing disregards no longer apply.
This has been a very wide debate. Although you, Mr. Speaker, were not present to hear it all, I assure you that it ranged very widely. The House behaved well. We all resisted the temptation to go into the subject of child benefits or child interim benefits in any detail, although we touched on defence and a

number of other matters. I have not dared follow the remarks made by my hon. Friend the Member for Keighley, although his point of view is shared by a number of his hon. Members on both sides of the House.
I have answered the points raised to the best of my ability. I hope that I have done so fairly thoroughly. I am sorry to have taken so long. This has been a debate on Government support for one-parent families, what the Government are doing and whether they should do more. We may always do more. Within the constraints of public expenditure—which I think most hon. Members on both sides have recognisedone-parent families will be one of the major priorities for social security expenditure by the Government.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

SUPPLEMENTARY BENEFIT (AMENDMENT) [MONEY]

Queen's recommendation having been signified—

Resolved,
That it is expedient to authorise such increased payments out of money provided by Parliament as may result from an Act of the present Session increasing to £6 a week, in the case of the parent in a one-parent family, the earnings disregard' under paragraph 23 of Schedule 2 to the Supplementary Benefit Act 1966.—[Mr. Snape.]

SOCIAL SECURITY BENEFITS

11.33 p.m.

The Minister of State, Department of Health and Social Security (Mr. Stanley Orme): I beg to move
That the Supplementary Benefit (Determination of Requirements) Regulations 1976, a draft of which was laid before the House on 13th May, be approved.

Mr. Speaker: With this we may take the Social Security Benefits Up-rating Order.

Mr. Orme: As you have said, Mr. Speaker, it may be for the convenience


of the House if we discussed at the same time the second motion,
That the Social Security Benefits Up-rating Order 1976, a draft of which was laid before the House on 13th May, be approved.
The purpose of these two instruments is to provide for most of the increases in benefits announced briefly on 6th April by my right hon. Friend the Chancellor of the Exchequer. and in detail in her statement on 7th April by my right hon. Friend the Member for Blackburn (Mrs. Castle) as Secretary of State at that time. I say "most of the increases" because those for war pensioners are dealt with in separate prerogative instruments. I shall deal first with the national insurance and industrial injuries benefits which are covered by the Order and turn later to the supplementary benefit increases provided for by the Regulations.
A list of the main national insurance and industrial injuries rates is to be found in Appendix 1 of the Government Actuary's Report on the uprating Order. Command Paper No. 6478, published at the same time as the Order, it is available to the House. It might be helpful if I refer to some of the principal items. For example, the standard rates of retirement pension will be increased from £13·30 to £15·30 for a single person and from £21·20 to £24·50 for a married couple—increases of about 15 per cent. Other long-term benefits will rise by corresponding amounts. The standard rate of sickness and unemployment benefit will rise by about 16 per cent, from £11·10p to £12·90 for a single person and from £18 to £20·90 for a married couple. Other short-term benefits will rise by corresponding amounts.
On this occasion a higher percentage increase has been given to the short-term benefits. The Government have thought it right, in present circumstances, that there should be some closing of the gap, in percentage terms, between short and longterm benefits. It is proposed that the rates of benefit in the Order will become payable in the week beginning 15th November which is one year after the last increase.
The Order is short and simple. Article 1 is formal. The increased rates are provided for by Article 2 together with the Schedule, while Article 3 provides for the dates from which the various increases in

benefit are to take effect in the week beginning 15th November. Articles 4 and 5 are technical. One updates the Social Security (Pensions) Act 1975 and the other formally revokes last year's uprating Order.
As the Chancellor and my right hon. Friend the Member for Blackburn indicated when announcing these increases, we have changed the method of estimating the movement of prices and earnings from November of last year, when the previous uprating took place, to November of this year, when the present one is due. That estimate is needed to calculate the increase required in pensions and other benefits.
Before I go into any further details of the uprating I wish to emphasise that the Government have not gone back on their pledges or sought to escape from their legal obligations. In our election manifesto of 1974 we made a firm pledge to increase pensions immediately to £10 a week for a single person and to £16 a week for a married couple and thereafter to increase pensions in line with the movement of average earnings. Pensions were increased to £10 for a single person and to £16 for a married couple in July 1974. Further, we specifically provided in the Social Security Act that the Secretary of State must review the rates of pensions not less frequently than once a year and ensure that pensions maintain their value in line with the general level of earnings or prices, whichever is the more advantageous to pensioners.
So far the Government have raised pensions three times—in July 1974 and in April and November 1975. These increases at relatively short intervals were intended to protect pensioners during a period of exceptionally high inflation. That intention has been fulfilled. Between July 1974 and November 1975, when we last raised pensions, prices and male manual earnings rose by 31 per cent. while the single pension rate rose by 33 per cent. We are now, with a falling rate of inflation, returning to the system of annual reviews, as we have always said we would. The rates we are proposing for November 1976 give a further increase of 15 per cent. We are confident—and I stress this—that this increase will be more than sufficient to maintain the November 1975 value of the pension.
Since the last uprating by the previous Government in October 1973, we have increased the single rate of pension by over 70 per cent., and the proposed rises will take that to 97 per cent. in November. Since October, 1973 prices have risen by 61 per cent. up to May, 1976. These figures show clearly that not only have we protected pensioners from inflation but we have given a substantial increase in real terms in the value of their pensions.
I turn to the draft Regulation which provide for increases in supplementary benefit scale rates under Schedule 2 to the Supplementary Benefit Act 1966. As in previous upratings, the increases in the rates are, broadly speaking, the same as the increase in national insurance pension and benefit rates. The new rates will take effect at the same time as the national insurance increases—the week beginning 15th November 1976.
As regards details of the increases, Regulation 2 provides first for increases in the supplementary benefit scale rates. These rates represent the level to which retired and other people not in full-time work can have their incomes made up. They cover all normal requirements other than rent, for which an addition is made to the scale rates. It is proposed that the long-term scale rates, which apply to supplementary pensioners and to people other than the unemployed, who have received supplementary allowance continuously for two years, should be increased by £2 for the single householders to £15·70, and by £3·30 a week for a married couple, to a new rate of £24·85. If a supplementary pensioner or his wife are over 80, the rate will continue to be 25p higher at each point.
The ordinary scale rates, which apply to the unemployed and to people who have been receiving supplementary allowances for less than two years, will be increased by £1·80 to £12·70 for a single householder, and by £2·90 to £20·65 for a married couple. These are the same cash increases as in the short term national insurance rates.
Scale rates for other adults and children are being increased, and the special rates which apply to the blind will go up by the same amount as the corresponding rates for sighted persons,

so that their special preference is continued.
Regulation 2 proposes increases in the amounts added for attendance requirements for in assessing supplementary benefit for a person who receives an attendance allowance. These requirements will be increased by the same amount as the increases proposed in the attendance allowance itself. It is also proposed that the standard weekly addition in the case of a claimant living as a member of another person's household should be increased by 20p to £1·20.
As a result of the changes in the scale rates the income of adult non-householders goes up by £1·80 a week for supplementary pensioners and other long-term recipients, and by £1·65 for other non-householders.
There are two other changes which are not provided for in the regulations, but which are an important element in the uprating. As the Former Secretary of State announced on 7th April, the Supplementary Benefits Commission has decided to increase the discretionary addition for extra heating and the standard addition for special diets by about 25 per cent. These changes take effect from 15th November 1976—the same time as the increases in scale rates.
About 12,500,000 people will receive an increase in benefit next November as a result of these proposals, at an additional annual cost of £1,335 million. At the same time there will be an additional cost of £37 million for war pensions and of about £14 million for the increases in supplementary benefits discretionary additions. This gives a total expenditure of £1,386 million in a full year.
I have pleasure in commending the Order and the Regulations to the House.

11.45 p.m.

Mr. Robert Boscawen: Regrettably I cannot accept these two uprating instruments with wild enthusiasm. I should like to be able to do so as I have always had to accept uprating Orders before with gratitude, whichever Government introduced them. This year will prove, however, a vintage year for reneging on solemn commitments to pensioners, and we on the Conservative side of the House are deeply disappointed at the way in which pensioners have been treated. It is a year in which the poor


have never been taxed so high, if they are lucky enough to have jobs, that is. Regrettably, 1976 will be a vintage year for the poverty trap, a year when thrifty pensioners are told to put off the evil day of paying astronomical fuel bills with small hopes of extra help coming when their doomsday arrives.
The Labour Chancellor has allowed inflation to cheat pensioners whom he had promised to defend, by breaking his commitment to them to the tune of £500 million. Quite simply, the Government have gone over to a new method of calculating the benefits by shifting the relevant base period for the latest uprating. It is very easy for a Government to confuse the uninitiated over this, and I intend to explain in detail later in my speech what we think they have done. In essence they have eliminated any protection for pensioners against the peak months of inflation between March and November last year. Very few commentators in the Press were taken in at the time by this measure, and least of all was the Child Poverty Action Group taken in.
First, let me deal with the way in which the House now alters the benefits. In the past there has always been an important uprating Bill on each occasion to introduce the new levels of benefits. In the Social Security Act 1973 the then Conservative Government decided no longer to do that. Thus tonight is only the second occasion on which we have altered benefits by Order. It is the first year in which a whole area of social security benefits and contributions has not been raked over in Standing Committee.
The previous Government took the view that when there was just a straightforward uprating of benefits it would be for the convenience of the House to enable pensions to be raised without any legislative delays such as would be necessary if a full Bill had to be introduced. But I sincerely question—and this is not a party matter—when there is a significant departure in the method of calculating the benefits, as there is in these uprating Orders, and when there is some shift in priority, whether the conditions envisaged by the former Government's legislation still hold good.
Tonight it is possible only to scratch the surface of a wide range of benefits.

In the past, we have spent many hours in Committee going over the benefits and hon. Members have benefited from that opportunity. Are we satisfying the House or doing our best by the recipients by introducing such a wide range of benefits in this way?
The Government have made a modest shift in priorities away from the longterm beneficiaries—retirement pensioners, widows, the disabled and war pensioners—to those on short-term benefits—sickness and unemployment up to 312 days, industrial injuries up to 26 weeks and widows' and maternity allowances.
This is a modest, but significant, shift of 1 per cent. I do not believe that the Government have grounds for saying that the short-term beneficiaries—even the many unemployed who have considerable difficulties—are in such dire need as the very elderly and the long-term sick.
Short-term benefits are not taxable and for the first six months, there is an earnings-related element in many people's unemployment pay, as well as tax repayments in some cases.
I hope that the Government thought it out carefully before making this shift and that it is not yet another retreat before the self-interest of trade union members. Many hon. Members on this side believe that if there is to be a shift, the emphasis should be placed where the shoe pinches most and particularly on those receiving the age addition, which has not been increased since its introduction by the last Conservative Government.
The first letter that I took from my postbag this morning was a copy of a letter sent to the Prime Minister. It came from an old lady of well over 80 who was pleading with the right hon. Gentleman to help old people in the West Country. She said:
Why are we old age pensioners having to suffer so much? My family is all married. We can't honestly go on. Please help Somerset old people. Give them a little happiness in this last few years. So many have got ill. Speaking for them all as well as myself, don't let us die. Let us have a bit of happiness in our old age.
That was a cry from the heart. Many hon. Members will have had similar letters. People on the age addition in my view are the most in need of help in any shift of emphasis.
Returning to changes in differentials, I am perturbed to see that industrial


injury pensioners with the maximum degree of disablement and the 100 per cent. disabled war pensioners have not moved in fact in line with other long-term beneficiaries and have consequently suffered a slight reduction in the differentials. I do not know whether this is intentional or a matter of rounding-up, but it requires a satisfactory explanation, otherwise it will be widely resented. I must declare a small personal interest—namely, that I am entitled to a disability pension.
It is right to mention the position of war widows. For the first time they have become taxable on their war widow pension alone. That pension is taxable even if they have no other income. That illustrates how tax thresholds have been reduced and how deserving people are being hit.
I now turn to some of the non-contributory benefits, especially the non-contributory invalidity pension. I draw attention to what is said about it in page 6 of the Government Actuary's Report, which is a matter for concern. We find that the level of take-up of the non-contributory invalidity pension has been very slow. I know that these are early days, but the report states:
The major reason for the lower total of take-up was that about half of those receiving supplementary benefit chose to remain on that benefit rather than to switch to a combination of non-contributory invalidity pension and supplementary benefit.
That is exactly what we were warning the Government would happen if they did not do something about introducing a sensible level of disregard for supplementary benefit purposes. I recall hon. Members on both sides of the House, especially those who took a great interest in bringing about the pension, including my hon. Friend the Member for Wallasey (Mrs. Chalker), and all the members of the All-Party Disablement Group, warning the Government that unless they disregarded part of it for supplementary benefit purposes, the new non-contributory invalidity pension would be meaningless for the poorest people. That is virtually what has happened.
I remind the House that the Conservative Party produced a document before the last election in which it suggested that it was essential to allow a substantial disregard, otherwise it would be meaningless for the poorest. Many of

those who are entitled to non-contributory invalidity pensions have been too impaired ever to have worked in their lives. We are talking about an area in which there is great poverty.
Another disturbing factor about the Government Actuary's Report is that we have no news about the extension of the non-contributory invalidity pension to the disabled housewife. I was privileged to move an amendment to try to bring the disabled housewife within this secheme during the Report stage of the Social Security Benefits Act last year. We had a long and very moving debate about it, in which the Under-Secretary, the hon. Member for Manchester, Wythenshawe (Mr. Morris), and my hon. Friends, particularly my hon. Friend the Member for Wallasey, made memorable speeches. At the end of the debate we withdrew that amendment because an undertaking was given to us by the Minister for the disabled, the hon. Member for Wythenshawe, that the Government would do their best to introduce this allowance for them as soon as they could after making the proper administrative arrangements.
There are I know a number of difficulties about the definition of an individual who is incapable of performing normal household duties. But we have been waiting for a very long time since we withdrew that amendment to hear a date when the disabled housewife will be included in the scheme. This is a matter on which the House feels very strongly. I know that the Ministers concerned now were doing other important jobs at the time, but if they had been present at that debate I am quite sure that they would have been moved by it. It would help the House if they could give any indication at all tonight that they are prepared to give some date to which the disabled housewife can look forward to becoming entitled to the non-contributory invalidity pension.
I turn now to the supplementary benefits scale rates. I am immediately struck by the fact that the Government have not yet grasped the full urgency of the need to tackle the problems of the high cost of fuel for pensioners. The fuel bills that pensioners have been receiving lately have been appallingly high. The sort of bills I have been seeing in my constituency for the winter quarter have


been in the order of £80 to £90, and in one case £110, in some of the cold villages on top of Mendip. The highest scale rate is now to be increased to £2·10 a week only. Thus one quarter's worth of electricity would absorb the whole year's scale rate.
It is not good enough. It will not help people who are now terrified of the electricity bill for the winter quarter. The House must consider much more seriously what we are to do in future, and in the coming winter—we have not got very much time to think about it—about the level of fuel bills of all kinds for some elderly pensioners.

Mr. Orme: I think that the hon. Gentleman is probably aware that the Government are now discusing this matter with some urgency to see what can be done, or whether anything more can be done than the uprating that I have announced tonight. While the hon. Gentleman is making the case, however, he must take on board the fact that this will mean increased public expenditure and the fact that these higher fuel costs have arisen because the nationalised industries are made to balance their budgets and stand on their own feet commercially. The hon. Gentleman's party has advocated those policies and he cannot now duck out from the responsibility involved in them.

Mr. Boscawen: I do not duck from such responsibilities. I bitterly regret that the economy is in its present mess. The Chancellor has had to cut about £500 million off Social Security benefits after a solemn undertaking last year to do otherwise, but we should look carefully at our priorities for helping those people more, otherwise some of them will die of hypothermia. They cannot pay such bills. We have to shift priorities. The Government are spending so much money on their schemes in many spheres, and that money could be shifted to this more vital area of need.
The death grant is at an absurd level. I do not suggest that we can spend a lot more public money on putting it up—I tried to suggest that on many occasions when times were considerably better than they are now. The death grant is now £30. That is ridiculous when I am told that the minimum cost of a reasonable

funeral is between £125 and £130. About £25 million is being spent on that minimal death grant of £30. Perhaps we could go back on some of our commitments not to extend means tested benefits and hand over that sum to the Supplementary Benefits Commission for it to use to pay considerably higher death grants to those on supplementary benefit. I realise that that would be against many hon. Members' principles. We have said that we do not want to extend means tested benefits but this is a humane case which we should look at again.

Mr. Orme: I think that the figure for death grants is £15 million, not £25 million.

Mr. Boscawen: I am grateful to the Minister. I obtained my figure from the Government Actuary's Report in Appendix II which gives the figure of £25 million for 1976–77. But I may have misread the figure which could refer to some other matter.
The income tax system is having an increasingly serious effect on social security benefits. I hope that I shall be allowed two minutes to discuss that without being called out of order, Mr. Speaker. In Committee Room 8 upstairs hon. Members are discussing measures which slice into the income of the low paid and into the benefits which we are seeking to examine and approve on the Floor of the House. Someone from another planet would think that we were not worth visiting. It is ridiculous. We have reached the stage when for many thousands of families it does not pay to work and there are two official standards of poverty, one for those on the supplementary benefit scale and another for those on low wages who are paying a supertax.
Let us take a single individual in category B in the new scale rates of supplementary benefit, whose minimum essential needs are deemed to be £15·70 a week—about £1·50 a week above the new income tax threshold level of another single person working for a similar amount. The luckless man in work pays 35 per cent. tax on that £1·50, plus a National Insurance contribution.
That sort of effect invites the cynicism and despair of people outside the House. It must in part contribute to the sickness of this country and must damage the will


to work. Yet the Government are making no attempt to prepare the way for a sensible system in which tax and benefits are brought together under one umbrella and the level of taxation is reduced.
The sooner we get rid of this debilitating dual nonsense, the better. The longer the reform of the tax benefit arrangements is put off, the worse it will be for the country and the longer it will take us to recover.
I return to the gravamen of our charge against the Government, the broken pledge to protect fully the pensioner from the ravages of inflation. Most of us believe that in the 1975 Social Security Act the Government had committed themselves unequivocally to the existing historical basis for calculating the benefits that would be payable this autumn.
I should like to quote something that was said by the late Brian O'Malley, whom we always regarded as someone who always acted in absolute good faith. He drew on great experience in these matters. On the question of the historical basis for calculating benefits, he said in the Standing Committee on the then Social Security Benefits Bill:
I believe that I have demonstrated to the hon. Gentleman that the historic method is, in the end, the fairest method. It means that there is a consistent link between the movement of earnings on the one hand and the movement of retirement pensions and long-term benefits on the other."—[Official Report, Standing Committee B, 12th December 1974; c. 191.]
We on this side of the House believed that we also had this commitment spelt out in Section 125(3) of the Social Security Act 1975, which says:
If on any such review"—
it is referring to the review which the Secretary of State had to undertake annually, under an earlier part of the section—
the Secretary of State concludes that any of the sums in question have not retained their value as mentioned above, he shall prepare and lay before each House of Parliament the draft of an up-rating order increasing those sums at least to such extent as he thinks necessary to restore their value.
We believe that that section means sticking to the existing historical basis for calculation.
The relevant period for the last up-rating was defined for us by the right

hon. Member for Blackburn (Mrs. Castle), then Secretary of State, when, referring to the uprating last November, she said that
These increases are in line with the movement in earnings of nearly 15 per cent. that has taken place in the period from August 1974 to March 1975, which is the relevant period for calculating this uprating."—[Official Report, 22nd May 1975; Vol. 892, c. 1624.]
Last but not least, there was the statement a year ago from the hon. Member for Oldham, West (Mr. Meacher), then Under-Secretary of State, Department of Health and Social Security. He said:
Changes in the movement of earnings and prices after March 1975 will of course be reflected in the next following uprating."—[Official Report, 24th June 1975; Vol. 894, c. 376.]
If that does not mean that the calculations should be made on the levels of change in earnings or prices following March 1975, I do not know what does. It is spelt out as clearly as can be. What could it mean but that the Government intended to increase long- and short-term benefits by the amount that prices or earnings had risen between March 1975 and March 1976, now known to have been some 21 per cent. in the case of prices?
The Government have devised instead a brilliant way of cutting the social security bill by £500 million. Not content with making pensioners wait a full 12 months before their rise took place—in itself a substantial saving—the Government skipped neatly over the worst months of inflation between March and November 1975, and based their calculations on an estimate of the inflation rates between November 1975 and November 1976. Thus the expected rate for the pension increase which we are now debating was cut from 21 per cent. to this rise of between 15 and 16 per cent. Therefore we are back where we started—to the annual review and to the falling standards of the poorest in this country, with every week seeing a reduction in their purchasing power.

Mr. Orme: I am listening very carefully to the argument that the hon. Gentleman is deploying on this issue, but the fact is that when these benefits are paid in November there will be a net increase for pensioners which will compensate for the increases over the 12


months. The hon. Gentleman cannot get away from that point.

Mr. Boscawen: But the Minister has not yet compensated those concerned for the months from March 1975 to November 1975 when the highest rate of inflation of all was in operation. That is the problem. I hope that the Minister will go back and do his sums. He cannot go on saying that he has taken account of those months.
I am also extremely perturbed about the cut-back for another reason. At the same time as pensioners are suffering a cut-back following the enormous increases in prices in relation to the Retail Price Index, they are also suffering cuts in public services—services on which hitherto they have been able to rely.
We all know that there are cut-backs in the number of home helps in many parts of the country. I understand that because of cost many hundred of pensioners have asked for their telephones to be removed. Furthermore, public telephones are now being removed by the Post Office. On a new housing estate in my constituency—an estate containing many old people—the Post Office refuses to put in a public telephone within a reasonable distance of the housing estate because the Post Office says it cannot afford it. The Post Office refuses even to put in a pillar box. This is happening in a rural area in my constituency in which village after village is virtually without bus services.
All these are deteriorating services—services that are most necessary to the elderly people and others in the community. We bitterly regret that the economy is in such a state that the Government cannot meet the commitments they have made in respect of this most deserving group of people in the country.

12.23 a.m.

Mr. D. E. Thomas: I shall not detain the House for long, but wish to make only a few remarks.
In debates on social security expenditure, I am conscious of the dependence of people in areas such as those I represent on social security benefits. If we look at per capita spending on social security, we find that the figure in Wales exceeds that in the United Kingdom as a

whole by £5 per head. Invalidity benefit expenditure in Wales amounts to a figure of £15 per head compared with only £7 per head in the rest of the United Kingdom. In terms of sickness benefit, the level of expenditure in Wales is almost £16 per capita compared with a figure of £9 in the United Kingdom.
I have said on other occasions in this House that one of the major reasons for the high per capita expenditure in Wales flows from our greater dependence on social security benefits. This is partly due to the industrial structure. The sickness benefit figure can partly be explained by the far greater investment in Wales per man at risk. Furthermore, Wales has a higher percentage of elderly in the population and a great number of people on low incomes.
If we regionalise the situation and examine constituent parts of the United Kingdom, we find indicators of the relative dependence on sickness benefits and other social security benefits that are not often highlighted. Therefore, it is important for us to look not just at the overall level of benefit—in other words, at standard benefit throughout the United Kingdom—but also at areas in which there is a higher dependence on such factors and we must examine particular needs in those areas.
Again, in Wales we find that the expenditure per head on supplementary benefit is £17·76. Only Scotland and two English regions, the North and the North-West, have higher figures. The same applies if we look at the claims for supplementary benefit over the same period.
On behalf of the recipients of benefits, we welcome the upratings, but, like the hon. Member for Wells (Mr. Boscawen), I question the basis of the uprating. I should like to know whether the Minister can confirm that, if the peak period formula had been used, the retirement pension increase for a single person would have been to £16·10, as opposed to £15·30, and that for a married couple would have been to £25·65, instead of the £24·50 which we are offered now. The same applies to the supplementary benefit rates in that the ordinary rate after up-rating in November 1975 was £23·95. But, by November 1976, on the present formula, its real value will be eroded. The estimates range from £21·77 to as low as


£21·01. The same applies to the erosion in real value of unemployment and sickness benefit and of retirement and invalidity pension.
Given that the inflation rate for low-income families is likely to be greater than it is for families generally, here we see a greater deprivation and a greater inflation burden being carried by those sections of the population least able to carry those burdens.
I wish to make one further general point on these regulations. This is the opportunity that we have to make general points about the supplementary benefit system and about the social security system. I repeat what I said earlier about the extent of dependence on supplementary benefit and the fact that, over the period from 1948, when the national assistance scheme was first introduced, when we had 3 per cent. of the population dependent on the system, to 1974, which is the latest figure that I have, the percentage of the population dependent on supplementary benefit is now 7·5. It can be said, therefore, that the safety net which Beveridge talked about has become a dragnet. This has happened because our level of national insurance benefits the general social security benefits paid—is not sufficiently above the poverty line or the threshold of supplementary benefit payment. Until we get a clear commitment from both main parties to aim at an increase in the general level of national insurance benefits, to bring them substantially above—£3 or £4 above—the basic poverty line of supplementary benefit, we shall have this continued and increasing dependence on this means-tested benefit.
I come now to one or two points that I wish to make about specific benefits. I was disappointed to see that the maternity grant had not been increased, and here I declare a personal interest as an indirect recipient of the grant three months ago.
Then there is the death grant. Age Concern has written to the Minister about it. Although I appreciated the Answer given me by the Minister's predecessor, the late Brian O'Malley, that this could not be accorded high priority, there are ways, through exceptional needs payments and so on, within the supplementary benefit system in which the intention of the death grant could be achieved.
One other matter is that of child special allowances paid as part of the various national insurance benefits. A point which we ought to look at is whether the child special allowances generally should be age related. I am thinking specifically of the industrial death benefit and, particularly, of the invalidity and retirement pensioners' child special allowance, which are not age related. There is an increase for the first child and then a figure for any other child. An age relation would make it much fairer.
These are some detailed points which the Minister might like to pick up later in the debate.

12.31 a.m.

Mr. Orme: With the leave of the House, I will reply to the debate. The hon. Members for Merioneth (Mr. Thomas) and Wells (Mr. Boscawen) may like me to look at some of their points in more detail and I will write to them. In respect of maternity allowance, a case can be made out for all such benefits.
There are many deserving recipients and a multitude of important benefits. It all boils down to a matter of priorities. There is a limit to what any Government can do with limited expenditure. A famous previous Minister of Health often said that Socialism was the language of priorities. What he meant was that one had to decide. Even if there was a booming economy, and we had money to spare, there would still not be enough to improve many of the benefits because pressures would come in from all sides in that regard.
The hon. Member for Merioneth in a thoughful speech, made many important points. He asked whether the Government were right to go for a short-term benefits preference over the longer-term ones, in particular—pensions. I accept that this is a matter of judgment. One has got to take into account the position of the unemployed and other people who, at the moment, are having to claim these short-term benefits. The Government decided, in their judgment, to make a small change in favour of the shorter-term benefits. It is only a matter of 1 per cent. but it is an important shift.

Mr. Patrick Jenkin: If my hon. Friend the Member for Wells (Mr. Boscawen) will permit me, what many of us find


so puzzling in this is that the closing of the gap, increasing the short-term benefits by a higher percentage, has coincided with the time when the tax threshold affecting long-term benefits is as low as it is. It is at a record low level in real terms. Many of the long-term benefits will be taxed while the short-term benefits are not taxed. This seems a strange time to start closing the gap.

Mr. Orme: This is an endless argument. One wants to take those people in the lower income groups out of tax and one raises the tax threshold, but incomes increase and so do costs and so on. More people then come back into the tax net again. It is an endless argument, and the right hon. Gentleman can point to anomalies in that situation.
The Government had to make a judgment about whether to do anything more in respect of the short-term benefits and we felt there were people on short-term benefits who needed more assistance at the moment.
The hon. Member for Wells mentioned war pensions. He is a distinguished recipient of a pension himself and he declared an interest. Hon. Members are not often called upon to declare such an interest, and in the hon. Member's case it is a distinguished interest.
The hon. Gentleman said that the pension appears to be slightly reduced. First, the increase was the same in percentage terms. Then, as is normal, it was rounded down, but only by a few pence. There was no distinct discrimination.
The hon. Gentleman also mentioned the incapacity and invalidity pension and the earnings rule. In a previous debate, my predecessor and friend—I need not reiterate the feelings of respect we all had for Brian O'Malley—pointed out that earnings are incompatible with the basic concept of incapacity.

Mr. Boscawen: I was talking not about the earnings rule but about the level of disregard for supplementary benefit purposes. There is a nil disregard in the case of the non-contributory invalidity pension.

Mr. Orme: I take the point and I should like to look into it. Anyone who deals with this subject knows the labyrinth of complications involved. It is a very wise hon. Member who, when

tackled about benefits and entitlements—as I am in my local Labour Club and elsewhere—can give an absolutely correct answer without checking. The multiplicity of benefits and the problems of means testing create difficulties which I should like to see greatly reduced. But that is easier said than done.
I know the hon. Member's personal concern in this area. All hon. Members are concerned about these matters but their arguments would mean extra public expenditure. I have been asked about the change of the method and the sum of £500 million. The suggestions made would directly affect the borrowing requirement. We cannot talk about this fund and divorce it from the Government's general economic problems.

Mr. Kenneth Clarke: Would the Minister not accept that it would be possible to have respect for a Government who said that, because of economic strictures, they would have to cut £500 million off the anticipated up-rating and that they could not abide by the commitment which my hon. Friend the Member for Wells (Mr. Boscawen) spelled out and which has been made by former Ministers? What is not acceptable is what the Minister tried to do in his opening speech—that is, to pretend that there was no real change, by using bogus dates and comparisons in his reference to the uprating, and to try to gloss over the fact that £500 million has been cut from the uprating and that the pensions have not been uprated in line with the Government's commitment.

Mr. Orme: I do not accept that. The percentage increases prove my point. In spite of the Acts that were quoted, what the Government did was legally correct. The pension increases which will come into effect on 15th November are inflation-proofed. We do not accept the arguments producted by the Opposition.
We all know about the pressures which the Government face. Tonight we have seen the human face of Conservatism. However, some members of the Opposition, who are not present this evening, have a different attitude towards expenditure cuts. They do not care where the cuts are made as long as they are made. That is what we face now.

Mr. Patrick Jenkin: I must make this point abundantly clear, as I did in reply


to the right hon. Member for Blackburn (Mrs. Castle) when she made the initial announcement. We charge the Government with reneging on their explicit and express promises. But we recognise that this is inevitable in view of the economic situation in which the Government find themselves as a result of their mismanagement. I have made this clear to the pensions organisations. We cannot press the Government to spend more and to increase the total. It is shameful that this must be done, but we recognise its inevitability, given the position into which the Government have placed themselves. That is the position of my party.

Mr. Orme: I listened to what the right hon. Gentleman said about that. However, I do not go back on the statement that I made. The Opposition want the argument both ways. They want to press for more expenditure and say in the next breath that they are against it. The hon. Member for Wells said that not enough was being paid for pensions but that the people were paying too much tax. How otherwise shall we finance these benefits?

Mrs. Chalker: From the Exchequer.

Mr. Orme: The Exchequer makes a basic contribution. I think that the hon. Lady knows what are the percentages. That contribution comes from tax. The Opposition cannot have it both ways.
Reference was made to people who need telephones but who cannot afford them. It was said that the Post Office would not install telephones for old people as it was considered that they would not be able to pay for them. But which political party bayed at the door of the Post Office and other publicly-owned industries calling for the ending of subsidies, which means that those services will inevitably become much dearer? The Opposition must answer that point. I think that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) may agree with me on this point. I am sorry that we are not debating these matters at an earlier hour in front of a full House. These issues must be debated.
Tonight I am moving an Order for £1,335 million of Government expend-

iture in one year. That is the highest increase on record. It will give outstanding benefit to those concerned.
I next refer to retirement pensions increases. Let us go back two years. There was inflation in the last 12 months of the previous Conservative administration. What did the Labour Government do when they came to power? They increased pensions. There was a tremendous campaign throughout this nation. We increased pensions to £10 and £16. Since then we have increased pensions three times.

Mr. Kenneth Clarke: Since the last election the pension has been increased to compensate for inflation. The right hon. Gentleman cannot claim credit for the fact that £1,300 million extra is being spent when the real value of none of these pensions is being increased. The expenditure is necessary because of the rate of inflation, and the right hon. Gentleman is not able to compensate for that.

Mr. Orme: I gave the figures in my opening speech and no one challenged them. Since 1974, when the Government came into office, pension increases have more than compensated for both the increase in prices and the rise in average earnings. This is the basic argument and it is one which will be rehearsed on Monday.
We shall be asked what we are doing about introducing other benefits when, in reality, the Government are implementing the policies on which they were elected, despite a difficult economic background. The Government will ensure that those who deserve to be assisted do not suffer. That is where our priorities lie and where they will remain.

Question put and agreed to.

Resolved,
That the Supplementary Benefit (Determination of Requirements) Regulations 1976, a draft of which was laid before this House on 13th May, be approved.

Resolved.
That the Social Security Benefits Up-rating Order 1976, a draft of which was laid before this House on 13th May, be approved.—[Mr. Orme.]

CESSPITS (EMPTYING CHARGES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Snape.]

12.47 a.m.

Mr. Stephen Ross: We have been listening to an interesting debate about people who are in difficulties—pensioners and others on fixed incomes. I want to raise a grievance affecting very much the same sort of people. I am grateful to have the opportunity tonight of doing so. My subject is one that affects many householders throughout the country who are obliged, through circumstances and situation, to use sealed cesspits for their soil drainage systems.
I find that there is still some confusion in the minds of people as to the difference between a septic tank and a cesspit. I am sorry that at 12.47 a.m. I have to go into detail on this. Generally speaking, the former, if properly constructed with adequate filter beds and easy drainage through the surrounding soil structure, should operate effectively for many years without attention. I have had a house with septic tank drainage for 22 years and it has been emptied only twice.
A sealed cesspit, by the nature of its construction, must be emptied as soon as it is full. It depends very much upon its size how often that is done. Often it is as much as once a quarter, or possibly even more frequently if it serves a large family or business concern, or if it is of small capacity, as is often the case.
I do not blame the Government for the present situation. They are not responsible for the structure of local government or for the undemocratic regional water authorities with which England and Wales are unfortunately saddled. Nor could they reasonably have anticipated the outcome of the now famous Daymond case heard in the other place earlier this year which necessitated the more recent Water Charges Act, which, quite rightly, had to take account of the Law Lords' decision in that case. The decision was that householders without the benefit of a main drainage system should not have to pay a sewerage charge.
I suggest to the Minister that the Government cannot continue to hide behind

the excuse that they can do nothing further until some decisions are reached on the recent consultation document. This is the sort of answer we get every time we put Questions down in the House. Of course these deliberations will take a considerable time. But the fact is that many of our fellow-citizens are now facing hardship as a result of the Daymond case and the extraordinary differing scales of charges being levied by local councils and the various water authorities.
Take some examples from my own constituency to illustrate what is happening. In 1974/75 the Medina Borough Council provided two free emptyings of cesspits a year, after which a fixed rate of £4 was charged for each subsequent emptying, irrespective of quantity. In the current financial year the council has a fixed charge of £15 for each complete emptying, including the disposal. It intends to review these charges every year with a view to levying charges by 1978 which are sufficient to cover the full cost of the service, whatever that may be. It contemplates that the charge of £13 will rise, and rise substantially, by 1st April 1978. Out of the £13, the council has to pay £2·44 for each 1,000 gallons removed to the Southern Water Authority, which claims that its charges are amongst the lowest of any regional authority in the country.
The South Wight Borough Council used to make four free emptyings of cess pits a year. It is now charging £13·43 for removing the first 1,000 gallons alone, and £11·27 for each subsequent visit. For the average size cesspit of 4,500 gallons, a householder is charged as much as £60 for each emptying. It is not unusual for a constituent to want four emptyings a year. Total charges can be as much as £250. I have checked these figures with the Southern Water Authority.
No wonder my constituent, Mr. Arthur Pitt, of Bonchurch, near Ventnor, complained in a recent letter to the Isle of Wight County Press that he is facing charges of £53 to £63 for each emptying of his cesspit. His total charges are over £250 a year, and that is on top of £149 for his rates. As he is an old-age pensioner, he has not got the sort of income to pay these excessive charges.
He is not the only one. The fact that people have cesspits at all is often the result of planning or public health requirements, and they find themselves in this situation through no fault of their own. To add insult to injury, these people are required to pay VAT for the service, and they cannot get rate rebates on the charges.
Another constituent, Mr. Lister, of Lake, near Sandown, needs to have his cesspit emptied five times a year, and he is faced with the choice of not flushing his toilet—a pretty grim prospect in this hot weather—or of allowing his cesspit to overflow. He will probably fall foul of the public health inspector. Others resort to knocking a hole in the bottom of their tanks because they cannot afford these charges.
A third constituent lives in a water catchment area. He is obliged by the water authority to contain his effluent in a cesspit. When I applied on his behalf for a reduced charge for emptying the cesspit, because he had been drawn into having a cesspit by the rules of the water authority, I got no response.
On inquiry, I found that charges in other parts of the country varied from £20 for a first emptying and £10 thereafter in Cardigan to only £7 in Devon and £12 in Oxford. I heard of other cases in Scotland where the charge would go up as much as £200. There is just no consistency, and I believe that the Government must surely do something about that. It is their duty to request local authority associations and the water authorities to agree on a standard and, if necessary, a subsidised fixed charge throughout the country pending some further legislation which I would hope would return us to the position which obtained formerly when everyone paying rates made a contribution towards drainage.
The only alternative is to advise householders to appeal to the valuation officers for reassessment of their gross values. If the valuation officer does the job properly, I suggest that there will have to be some substantial reductions. Who would pay a rent of any size for a property which will face charges of up to £250 a year to empty the cesspit? These householders include old-age pensioners and other people on fixed incomes who

fact not only these charges but huge increases in electricity and gas charges and the rates. This matter can be left no longer. It is a terrible worry to the people concerned, and I hope that tonight the Minister of State will give an assurance that something will be done to help. I am glad to give the hon. Member for Faversham (Mr. Moate) the opportunity to contribute to the debate.

12.57 a.m.

Mr. Roger Moate: I congratulate the hon. Member for the Isle of Wight (Mr. Ross) on having succeeded where I failed in securing an Adjournment debate on this subject. I congratulate him on what he has said and thank him for his courtesy in allowing me a couple of moments to reinforce his case.
I imagine that many hon. Members would also be reinforcing that case if they had the opportunity, because this is a matter of immense importance to most rural areas. Townsfolk may take sewage disposal for granted, but the Minister of State will know that in many rural areas it is a matter of crucial importance to thousands, perhaps millions, of people. In my area of the Swale District Council, which has many parish councils, large numbers of individuals have expressed their great and understandable alarm about the charges they face this year for cesspool emptying.
I agree with the hon. Member for the Isle of Wight that the question of how this situation arose and why we face these circumstances is less important than the main issue. These are matters of history. It is more important now to know how we shall tackle this serious problem. I hope that the Minister will recognise how serious it is and say that there is some way in which action can be taken to deal with it, not in the years ahead, but this year.
Perhaps I may give an example—just one of many—from my constituency of the sort of case which has arisen. A constituent of mine last year paid £3024 for cesspool emptyings. This year he is faced with paying £140·58. That is not as serious as many cases, but it is a tangible example of what is happening. One can imagine the alarm felt by a person faced with the prospect of paying that amount of money. Even taking


account of the credit on the general service charge of £26, my constituent will still be paying £114 more than last year's bill.
Many people are facing extra payments of hundreds of pounds. Some way must be found of ensuring that this extra charge levied by the water authorities is lifted. I should like to see the restoration of the position before re-organisation when it was the widespread practice of local authorities to make no charge, or only a nominal charge, for emptying and to deal with treatment as part of their overall responsibility for disposal without a special charge being levied above that of the amount included in the general rate.
If a village is put on the main drainage, it is inconceivable that the major capital cost would be borne only by ratepayers in the village. Just as that cost would fall upon the general ratepayers, the reception and treatment of sewage from cesspits should be part of the general responsibilities of water authorities.
I hope the Minister has some words of comfort and hope for the many people who are alarmed by the present situation.

1.1 a.m.

The Minister of State for Sport and Recreation (Mr. Denis Howell): I am grateful to the two hon. Members who have taken part in this debate for putting in a moderate manner a case about which they and their constituents feel very strongly.
I am particularly grateful to the hon. Member for the Isle of Wight (Mr. Ross) for appreciating my difficulties and making clear that he exonerates the Government from any responsibility—at least so far.
It is not possible to change the law, as the hon. Members have asked, in the forseeable future. I am well aware of the extent of concern on this matter. There are no reliable figures, but we estimate that there are about 900,000 cesspits in this country, which gives an indication of the scope of the problem.
I sympathise greatly with the many people who have found themselves in difficulty. The hon. Member for the Isle of Wight referred to the difficulties faced by pensioners. The only immediate comfort I can give him is to say that I have

ascertained that the Supplementary Benefits Commission will consider these increased charges as a matter for its concern. The hon. Member could suggest to old people on supplementary benefit that they make inquiries in that direction. I recognise, of course, that this will not bring much comfort to pensioners who do not receive a supplement.
We must ask what has caused these increased charges. There are two elements. First, local authorities can charge for emptying cesspits, but they do not have to. They can provide the whole service or some emptyings free of charge. The Secretary of State has no power to interfere with that unfettered discretion.
Hon. Members will have more influence than I with their own local authorities. If this problem is of the dimension suggested, the first thing to be done is for hon. Members and their constituents to press local authorities to ensure that the full economic charge is not made in certain cases. It is for the local authorities to decide, but I think it is for the hon. Gentlemen and their constituents to press their local authorities to exercise their discretion rather than to ask me to take immediate action, which cannot be taken having regard to the difficulties of the parliamentary timetable.

Mr. Stephen Ross: I have made representations, as I am sure other hon. Members have, to my local authority. I have illustrated the wide variation in charges throughout the country. I suggest that the right hon. Gentleman should contact the local authority associations, for example. Surely this is a matter that he could take up with them.

Mr. Howell: I shall refer to the associations later, but perhaps more enlightened members should be elected to the local authorities. If the pricing policy is producing a heavy burden on certain sections of the hon. Gentleman's constituency, it would seem that he has a legitimate point to put to the authority.
The second element in the cause of the increase is that the water authorities can charge for the disposing of the contents of cesspits. The local authorities do the emptying and the water authorities carry out the disposing. As a result


of local government reorganisation, there are now two authorities involved, both of which are increasing their charges.
That is the legal position, but let us consider what is actually happening. The Department of the Environment, together with the local authority associations, has asked all local authorities to keep down public expenditure—that seems to have the support of both sides of the House—by reviewing their charges and ensuring that the services they perform for their electors are carried out on an economic basis.
I take this opportunity of expressing my sympathy for those who are facing these greatly increased charges, but one of the consequences of the Daymond case was for local authorities and water authorities to carry out a real economic costing of the actual charges of the services they had been rendering. They found that they had been offering these services at an uneconomic price.
It may be right that local authorities and water authorities should be prepared to keep down the price by subsidising these activities, but the cost has to be paid by someone. That is why I said that 900,000 households are affected. If we did not charge the householders the full economic charge, the bill would have to be met by someone. That would inevitably mean increased charges for other householders.
Many of those who were making loud noises at the time of the Daymond case and who demanded immediate relief failed to realise that they would set in train reviews of economic prices. To a large measure that is what happened. The recipients of the benefits obtained by the Daymond case, as the hon. Member for Faversham (Mr. Moate) fairly pointed out, have had a rebate this year. They have had a rebate this year as a result of that Law Lords' judgment. As they have had a rebate, I suppose that it is inevitable that they are now faced with this action by the appropriate authority.
Concerning charging policy, my Department has given, as I say, only general advice to local authorities about charges—to keep these matters under constant review. However, I agree that it is reasonable to ask local authorities, when doing that, also to weigh the social consequences of what they are doing and

questions of economic hardship upon various people. I hope that they will do that. I certainly undertake to draw the attention of the local authority associations to this debate and to what both hon. Members have said, in order that the authorities may weigh the economic considerations concerning their finances against the individual hardships which at present are undoubtedly occurring.
I should like to make one point in response to the comment that people might knock the bottoms out of their cesspits and let them drain away naturally. That would be an illegal act under the legislation for control of pollution. I am sure that the hon. Member for the Isle of Wight was not condoning in any way any sort of illegal practice, because all of us have spent a lot of time recently trying to tighten up our control of pollution legislation. It is important not to send people off down that path.
I come finally to the question of what we are to do about all this. There is no escape from saying that we have to wait for the review of the water industry, because if the Government are to intervene at all, they can do so, as I have already explained, only if the law is changed. There is no prospect of a change in the law on the water industry until this review has been carried out.
What is interesting is that the new water undertakings, the nine regional water authorities which have been established, which are nine separate nationalised bodies, have been running for only two or three years. Normally it would be totally unthinkable for this House, having established such a machinery, immediately to conduct a review of it. But that is what the Government are doing. Hon. Gentlemen opposite and I have made common cause on this on many occasions. We know that the reorganisation of local government and water, taken together, have perpetrated a great nonsense upon the people of this country, and the reorganisations have been found to be very objectionable by most people. I appreciate that feeling. That is why we issued the consultation document and stated that we were prepared to look at the water industry.
However, we have outlined our proposals. They are, specifically, that, instead of having nine or 10 separate


nationalised industries in this country and in Wales, we should have one national water authority, although the present regional water authorities would continue within their regions. There would then be a nationally co-ordinated strategy and nationally co-ordinated planning. But until we have got that, we cannot get what the hon. Member for the Isle of Wight is asking for, which is some form of national agreement about charging policy concerning emptying cesspits and disposing of the contents.
The present system hallows the different approaches by different regional water authorities, and we have no power to interfere. It is already clear from what we are being told that different views are coming forward as to what might happen in the near future.
There is one possibility, which I mentioned when answering a Question yesterday, and which was also put forward by the hon. Member for Faversham, with which I have much sympathy. That is that the whole of this business should be taken over by the water authorities, which should empty the cesspits and then charge people the normal water rate, as they charge other householders. However, I am putting that forward only as one of the ideas that we are considering, without any commitment, because I am bound to

consult all the local authority associations. One cannot take away powers from the local authorities without their agreement, and one would not dream of even considering that without having their careful advice, which I have not yet seen. Many of the comments from the regional water authorities go down that road. Others suggest that we should have a number of free emptyings a year—two or three, for instance—and then charge for the others. There are various views on that.
I want legislation to come forward as soon as possible after comments on the consultation document on all the problems. But it will be difficult in the next 12 months to bring legislation before the House because of devolution and other important matters.
I realise the problems that are involved. We will ask the local authority associations to take both the hardship and the economic factors into account. We have asked for all comments on the consultation document to be in by 31st July this year. We shall proceed with all possible speed to try to clear up the mess that the legislation has caused and to introduce more satisfactory arrangements.

Question put and agreed to.

Adjourned accordingly at seventeen minutes past One o'clock.